POTS (Plain Old Telephone Service) are your CO, incoming lines, and they are analog, IE, not digital. Your DKT phones are digital, connected to digital ports on the switch.
You can hook up an analog device, ie fax, modem, standard telephone, to the CTX if you have an ASTU, or a BSTU card installed. A PDKU, BDKU, ADKU, or BWDKU are all digital only cards. There is a half digital, half analog card, but I've never seen it. The ASTU is harder to see, because it is a circuit board, if installed, under the left cover.
I've never seen much of an advantage to having a fax in a system without a PRI. Most people have a dedicated line for fax anyway. I can see if it is primarily outgoing, then you could share the same lines as everyone else. I could maybe see if you created the auto attendant menus to send fax calls to the fax.
I usually keep them on their own lines.
