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The tutorial explains how to display items in a drop-down list in alphabetical order, despite the original list being unsorted. The presenter demonstrates with various office items and three types of drop-down lists. To achieve alphabetical sorting, a simple technique involving a ranking formula is used to determine the position of each item. A new sorted list is then created using a match formula to organize the items alphabetically. The process allows for visually sorted drop-down lists without manually rearranging the original unsorted list.