In Spring Boot, you create custom exception classes by extending RuntimeException. This lets you throw your own errors with messages. When you throw the exception, the program stops normal flow and looks for a catch block. In the catch block, you can handle the error, for example by returning a response with the error message. This process helps you manage errors clearly and give users helpful feedback. The execution table shows each step: defining the class, creating an instance, throwing it, catching it, and handling it. The variable tracker shows how the exception instance changes from null to thrown and caught. Key moments include why to extend RuntimeException, what happens when throwing, and how to get the message. The quiz tests understanding of these steps and states.