A hash function converts input data into a fixed-size number called a hash code. This code helps find where data is stored or retrieved. For example, the word 'apple' is processed character by character. Each character's ASCII code is added to a running sum. After all characters, the sum is taken modulo 10 to get the final hash code. This process is shown step-by-step in the execution table. The hash code changes as each character is processed. Modulo operation limits the hash code to a fixed range, useful for indexing storage. Different inputs can sometimes produce the same hash code, known as collisions. Understanding these steps helps grasp how hash functions work in data structures.