IHS is the default function of the Z-axis. IHS stands for Initial Height Sensing, which means that this function sets the pierce height before it begins each cut. IHS works be lowering the torch until it contacts the metal, setting the contact point as a zero, then raising the torch up to a height that you specify from the zero point. It then maintains this height through the cut loop. Once the cut is complete and the torch moves to a new position on the table, it will repeat this process before it fires the torch again.
THC is an optional add-on function of the Z-axis. THC stands for torch height control, which means that it controls torch height actively and automatically throughout the whole cut. THC works by reporting a live feed of the plamsa arc voltage to the motion control board, then the motion control board commands the torch to either lower or raise depending on how the voltage changes throughout the cut. IHS will still apply as each cut begins, then THC takes over once the machine is moving the torch to complete the cut.