The FETCH FIRST clause in SQL is used to limit the number of rows returned by a query. The query first applies any WHERE filters and then sorts the rows if ORDER BY is present. After sorting, FETCH FIRST N ROWS ONLY restricts the output to the first N rows. This does not change the underlying table data, only the query result. If the number specified in FETCH FIRST is larger than the total rows available, all rows are returned without error. This is useful for pagination or getting a sample of rows. The execution steps show starting with all rows, sorting them, then limiting to the first N rows, and finally returning those rows as the result.