This technique is used for starting a round, as an alternate to chaining xx sc, and slip stiching to join the round. With the live chain method, you will not have a hole in the middle of your round. I use if for all my patterns that use rounds. I'm not sure what the proper term for this is (my grandmother taught it to me, and she didn't know what it was called either).

1) Make a ring in yarn like below.

2) Draw hook through ring & grab yarn.

3) Pull yarn through so it looks like below.

4) Insert hook through ring, and grab yarn w/ hook. Pull yarn through hook.

5) Finish off the sc by grabbing yarn w/ hook again, and pull through both loops. This counts as the first sc. Continue making more sc's in the ring as needed or called for by the pattern.

6) When you are done with the sc's, pull the end of the yarn to close off the hole and bring both sides together in a round.

That's all!  To start your next round, just stitch into the first stitch.  There is no need to slip stitch or chain.

Still confused?  Here are some other sites that have good instructions. 

• CrochetMe: The Magic Adjustable Ring
• PlanetJune » Magic Ring (right-handed)