Multi-stage builds in Docker help reduce image size by separating the build environment from the final runtime environment. First, a build stage uses a full image with all dependencies and tools to compile the app. Then, a final stage starts from a smaller base image, copies package.json to install production deps only, and copies only the built app files from the build stage. This way, the final image excludes unnecessary files like source code and dev node_modules, making it much smaller. The execution table shows each step: starting the build stage, installing dependencies, building the app, starting the final stage, copying necessary files & installing prod deps, and finishing with a small image. The variable tracker highlights how files and image size change after each step. Key moments clarify why only specific files are copied and why the build stage is larger. The visual quiz tests understanding of these steps and their effects. Overall, multi-stage builds are a simple and effective way to keep Docker images lean.