Reply to Getting started, need help with set-up and gear

Alright so I've been looking into DJ'ing and it seems fun and I'm willing to give it a try. I've been looking into a time-coded Vinyl setup as it interests me the most. Though I have several questions on it:

1. I'm unsure whether or not the vinyls actually hold the songs or you are getting the music to play from Mp3's on your computer which are then loaded into your software of choice and the vinyl's are there just for the scratching and feel of vinyls while having the convience of digital Djing or that you need to find the Vinyls with the music at record stores and such?

2. What would be the best software for a time-coded vinyl setup, like is there one particularily designed with it, or the ones most compatible?

3. I'm on a low budget here so what are some brand names i could look into that at least give me a decent quality while still remaining relatively cheap, for mixers, time-coded vinyls, software, speakers, and headphones?

I know I'm asking a lot but for anyone to respond with links and helpful information I'd be really grateful .