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In this video tutorial, the instructor covers how to create and modify lists in Microsoft Word 2016. They demonstrate how to create both bulleted and numbered lists, as well as how to modify lists using tab stops. To create a bulleted list, the instructor highlights the desired lines, navigates to the Home tab, and clicks the bullet button in the paragraph group. They also show how to change the type of bullet used by expanding the library options. This allows for customization of the list format to suit the user's preferences.