Intercepting routes in Next.js uses a special folder named (.) inside a route folder. When a user clicks a link, Next.js router checks if the route includes an intercepted segment inside (.). If yes, it loads that segment inside the existing page without a full reload. The browser URL hides the (.) folder for a clean path. For example, navigating from /dashboard to /dashboard/(.)/settings renders the settings segment inside the dashboard page, but the URL shows /dashboard/settings. This improves speed and smoothness. If the route is not intercepted, Next.js loads the full page normally. Variables like Route, InterceptedSegment, RenderedComponents, and BrowserURL update step-by-step as shown in the execution table and variable tracker.