You need to subscribe for internet fax service. Your chosen provider will supply you with the necessary applications needed for the service. This one would only require an internet connected PC. There are many providers who offer such service like efax, send2fax,docuharbor and ringcentral.
If your pc's OS is windows xp pro，and you have a internal modem or external modem, you can send fax or receive fax by "fax service" of windows xp pro. Read this article,it could help you: http://support.microsoft.com/kb/306657
I remember back in the days of dialup you could send fax straight from your computer because you had that phone line connection, perhaps you can do it now with ADSL? Either way, as Rochelle said you need the fax function hardware connected, but what's wrong with an online service? UTBOX is another good one, they're all quite cheap too.
These days sending fax has become even more easy than years ago. Now you can send fax from your computer very easily and fast as well. You just need a printer, yes a printer that supports fax function. You can get many of them like all-in-one printer and more. You can than connect it to your computer, install the drivers and than start sending fax through your computer. You can make choice between Inkjet Cartridges printer or Laser Toner Cartridges/laser printer whichever is suitable to you.
You do NOT need to subscribe to anything if you have a fax modem, internal or external. You aren't going through the Internet so ISP's are not involved. Using your computer in this way is no different than hooking up a fax machine, except that you never need to print anything.
Many of my customers use business faxing software like Vsifax or Hylafax, and again, no subscription service is needed. That kind of software can support multiple modems and has strong customization features.
However, you may prefer the convenience of an Internet fax service. I certainly do; I have used Jcifax for many years. Faxes come directly to my email and I don't need to dedicate a phone line as I did before these services existed.
I still have an old fax machine. We use it when we'd need to scan something and have no other reason to - it just saves a step.