Reason Sound Mod Video

I saw this video on youtube http://www.youtube.com/watch?v=XhuM7gS1fEo&NR=1. What I want to know is how does this work, I understand the basics of midi like how it sends midi data not audio and that is why I cant see how this works. I have tried following the video before but it didnt work.

No need to reply ive jst found a useful topic in production techniques.