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In this Excel tutorial by John at Excel Campus, he explains how to create dynamic data validation lists that automatically update when new items are added to a source range. The process begins with the source range on the products sheet, where users should insert a table by navigating to the Insert tab and selecting the Table option (keyboard shortcut: Ctrl + T). Users need to ensure the "My table has headers" checkbox is checked. Once the table is created, it provides a structured way to manage data, allowing the dynamic updating of the data validation list as new items are appended to the table. John also mentions additional resources on getting started with Excel tables.