The one that finished last is dropped out of the race and all votes for that candidate are removed. That moves the second place vote into first place for the people that voted the last place candidate first.
Yes, I understood what it said. I am asking why would you do it that way? Why start with the people that picked the last place candidate? In other words, suppose there are 7 candidates. Why should the 2nd place choices of the people who picked the 7th place finisher be the ones that decide the winner while ignoring the 2nd place choices of everybody else?