Need help understanding how jQuery autocomplete script works

Dear fellow web developers:

I am a junior web developer, and I found the following autocomplete script online that uses jQuery, and PHP:

http://loopj.com/jquery-tokeninput/

I like it very much (the facebook script in particular), and I am trying to reverse engineer it to understand how it works (not the jquery file, but the html and php code).  However, I'm a little confused as to how this is working because on the one hand I see the list of tv shows listed inside the code of demo.html, but the items in the menu that drop down, don't reflect those values, so these values are clearly coming from someplace else.  Can someone please explain to me how this script functions using the php file that it works with?

Thanks in advance to all who reply.