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In the video tutorial, the process of converting a PDF file into an azw3 file for Amazon Kindle using an application called Caliber is explained. The steps involve downloading Caliber, opening the application, adding the PDF file to be converted, and then clicking on the convert book button. It is mentioned that Caliber is available for Mac OS, Linux, and portable devices, including mobile and iOS. The tutorial demonstrates quickly dragging the PDF file into Caliber for conversion.