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In this tutorial by John from Excel Campus, viewers learn how to create dynamic data validation lists in Excel that automatically update when new items are added to the source range. The video demonstrates how to utilize Excel tables and named ranges to achieve this functionality. John explains the process starting with selecting the product source range and inserting a table using the Insert tab or the keyboard shortcut Ctrl + T. He emphasizes the importance of ensuring that the "my table has headers" checkbox is checked. Once the table is created, it becomes easier to manage and extend the data validation list as new items are added.