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The tutorial demonstrates how to sort items in a drop-down list alphabetically, even if the original list is unsorted. The presenter utilizes a formula to rank the alphabetical position of each item, creating a new list accordingly. By applying a match formula, the items are then organized in alphabetical order for display in the drop-down. The tutorial mentions that there are three types of drop-down lists and refers viewers to another video for more details on when to use each type and how to populate them.