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In this video tutorial on Microsoft Word 2016, the instructor covers how to create and modify lists. They demonstrate how to create bulleted and numbered lists, as well as how to modify lists into a tab stop. To create a bulleted list, one needs to highlight the desired lines, go to the Home tab, and click the bullet button in the paragraph group. By clicking on the button next to it, one can choose from various bullet options, including recently used bullets and the bullet library. This allows for customization and defining new bullet styles based on personal preferences.