A hash table stores data by converting keys into array indices using a hash function. When inserting a key-value pair, the key is hashed to find the bucket index. If the bucket is empty, the value is stored directly. If not, chaining is used to add the value to a linked list at that bucket. This way, multiple keys with the same hash can be stored without overwriting. The example shows inserting keys 12, 7, 5, 17, and 20 into a hash table of size 5 using modulo hashing. Collisions occur at bucket 2 and bucket 0, handled by chaining. The variable tracker shows how each bucket changes after each insertion. Key moments clarify why collisions happen and how chaining solves them. The quiz tests understanding of bucket states and hash calculations.