The d-dimensional discrete Schrodinger operator whose potential is sup- ported on the subspace Z d2 of Z d is considered: H = Ha + VM ,w hereHa = H0 + Va, H0 is the d-dimensional discrete Laplacian, Va is a constant potential, Va(x )= aδ(x1), x =( x1 ,x 2), x1 ∈ Z d1 , x2 ∈ Z d2 , d1 + d2 = d ,a ndVM (x )= gδ(x1 )t anπ(α · x2 + ω )w ithα ∈ R d2 , ω ∈ (0, 1). It is proved that if the com- ponents of α are rationally independent, i.e., the surface potential is quasiperiodic, then the spectrum of H on the interval (−d, d) (coinciding with the spectrum of the discrete Laplacian) is purely absolutely continuous, and the associated generalized eigenfunctions have the form of the sum of the incident wave and waves reflected by the surface potential and propagating into the bulk of Z d . If, in addition, α satisfies a certain Diophantine condition, then the remaining part R (−d, d) of the spectrum is pure point, dense, and of multiplicity one, and the associated eigenfunctions decay exponentially in both x1 and x2 (localized surface states). Also, the case of a rational α = p/q for d1 = d2 = 1 (i.e., the case of a periodic surface potential) is discussed. In this case the entire spectrum is purely absolutely continuous, and besides the bulk waves there are also surface waves whose amplitude decays exponentially as |x1 |→∞ but does not decay in x2. The part of the spectrum corresponding to the surface states consists of q separated bands. For large q, the bands outside of (−d, d )a re exponentially small in q, and converge in a natural sense to the pure point spectrum of the quasiperiodic case with Diophantine α's.