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In this video tutorial, the presenter explains how to create a password-protected folder on Windows 10. The process involves selecting a folder containing files you wish to protect, such as text documents, PDFs, videos, or images. First, right-click on the folder, select "New," and then create a "Text Document," naming it (e.g., "folder lock"). The presenter demonstrates opening the newly created text file to add content for the password protection setup. Although the detailed steps for enforcing the password protection are not included, the initial setup is clearly outlined.