**Core Concept**
Digitalis is a cardiac glycoside used to treat heart failure and certain arrhythmias, including atrial fibrillation. It works by inhibiting the sodium-potassium ATPase pump, leading to an increase in intracellular calcium and a subsequent increase in contractility.

**Why the Correct Answer is Right**
In atrial fibrillation, digitalis increases vagal tone, which helps to slow the ventricular rate by increasing the refractory period of the atrioventricular (AV) node. This is achieved through the activation of muscarinic receptors in the AV node, which are stimulated by the increased acetylcholine release. The resulting decrease in AV nodal conduction velocity and refractoriness helps to reduce the ventricular rate, thereby improving cardiac efficiency.

**Why Each Wrong Option is Incorrect**
**Option A:** This option is incorrect because digitalis does not primarily act by increasing the refractory period of the AV node in atrial fibrillation.
**Option B:** This option is incorrect because digitalis does not primarily act by decreasing the contractility of the heart muscle in atrial fibrillation.
**Option C:** This option is incorrect because digitalis does not primarily act by increasing the conduction velocity of the AV node in atrial fibrillation.

**Clinical Pearl / High-Yield Fact**
The therapeutic effects of digitalis are most pronounced when the patient is in a state of mild to moderate digitalis toxicity, which can be achieved by carefully titrating the dose.

**Correct Answer: C.**