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The tutorial explains how to create underlined text with dot leaders in a Word document. It demonstrates the process starting with a new document. First, a dot leader tab is created by opening the tabs dialog box and setting a right tab at 5.5 inches with an underline leader. After setting the tab, the user can type and use the tab key to fill in the blanks, which results in underlined text extending to the tab stop. This method allows for consistent, smooth underlines that align perfectly, regardless of where the text begins. The tutorial suggests that this technique enhances the presentation of documents with neatly formatted sections.