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In this tutorial, Jamin from Import Data demonstrates how to replace string values in text files or data frames using Python's replace function. This method is particularly useful for data cleaning and manipulation. He provides an example where the phrase "import data" in the sentence "Welcome to Import Data YouTube channel" is to be capitalized. The replace function takes two arguments: the word or string to search for and the string to replace it with. Jamin encourages viewers to like the video if they find it helpful and to subscribe for more content.