Yes, it does digital zoom but you have to set the photo quality to less than maximum. Once you lower the photo quality, you'll notice the ability to zoom by using your volume key.
However, the phone does not seem to allow you to zoom in on photos AFTER you have taken them. It has a "zoom" feature when viewing photos, but it doesn't appear to be functional.
After taking the photo you can zoom in on the photo, heres how; click on the photo you want to zoom and hit the zoom button. Then press with one finger the place you would like to zoom and hold down, the photo should zoom! hope you can understand and i helped :)