In PostgreSQL, functions that return multiple rows use RETURN NEXT to add each row to the output set without ending the function. The function continues running, allowing more rows to be added. When the function reaches a RETURN statement, it adds the final row and immediately ends, returning all collected rows to the caller. This process lets you build a set of rows step-by-step inside the function. The execution table shows each step: starting the function, adding rows with RETURN NEXT, and ending with RETURN. The variable tracker shows how the output rows list grows after each RETURN NEXT and RETURN. Beginners often confuse RETURN NEXT with RETURN; RETURN NEXT adds rows but does not end the function, while RETURN ends it. The visual quiz tests understanding of these steps and their effects on output.