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The tutorial explains how to create underlined dot leaders in a Word document. To begin, open a new document and access the tabs dialog box to set a right tab at 5.5 inches with an underline leader. After setting the tab, you can type content and use the tab key to create a consistent underline that extends to the tab stop. This method ensures that any text starts at the same position, resulting in a smooth appearance across the document. The presenter demonstrates how this setup allows for flexible text entry while maintaining uniformity in formatting.