I found this excellent explanation about how your PC prevents knock (pre-detonation), due to insufficient octane. Engineers designed into engines a safety mechanism to prevent possible pre-detonation damage (i.e., possible stress cracks in the pistons). To do so, the PCM responds electronically to a knock signal. The PCM then reduces power, electronically, by retarding the overall ignition timing. The PCM converts the voltage level to a corresponding spark timing degree, by which the engine should be retarded, so that the detonation is naturally eliminated. By doing this, the spark ignition of the combustion mixture occurs much later in the cycle of the piston compression stroke, thus reducing the effort the piston undergoes in compressing the gasoline vapor- about 15 degrees prior to TDC (top dead center). The later the ignition occurs, the less combustion that is compressed, and the less work the engine has to do. The effect of this is to cause the engine to lose a noticeable amount of power- approximately 2 hp per degree. At a 15 degree ignition retard, the engine loses up to 30 hp. At 25 degrees, it can lose approximately 50 hp. The other effect of this is reduced cylinder temperatures which immediately dissipates cylinder 'hot spots." With temperatures down and "hot spots" gone, detonation has been eliminated.