The Circularity form tolerance controls
the shape of all 2D cross-sections of a surface of revolution without
controlling the size, orientation, or location. The surface of the considered
circle must lie within a tolerance zone bounded by two concentric circles
whose radii differ by the specified tolerance zone. All 2D cross-sections
of the feature must be evaluated in a plane perpendicular to the axis.
Material condition modifiers and datum features are not allowed.

(A) If your drawing has this. (B) It means this. (C) A .001 wide tolerance zone.
If you use a manual measuring device, such as a Romer arm, it's difficult to accurately measure circularity. Take care to ensure all hits lie within a planar cross section. If you take measured data in different planar cross-section, PC-DMIS interprets the nominal variation of the surface as form error.