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In Excel Magic Trick number 848, the tutorial demonstrates how to create an automatic list of dates based on a selected month and year. Users can input any month and year, and the dates for that month will generate accordingly. The presenter first uses the fill handle to increment months automatically from January to December. Data validation is then added to allow for a drop-down list for selecting the month and year. The process involves accessing the data validation feature via Alt + DL or through the data ribbon. The source for the list is selected, ensuring that the cell only accepts values from the drop-down.