The digestive anotomy
Step One
The stomach is stapled just below the esophagus, forming a 20 to 30cc (1 ounce) stomach pouch above the staples, severely restricting the amount and kind of food or liquid that can be consumed at one time.
Step Two 
The small bowel is divided about four feet below the stomach (points A and B). Then a new 1.5 centimeter opening (stoma) is created in the stomach pouch (Point C).
Step Three 
The open end of the small bowel at Point B is attached to the new opening at Point C. Food and fluids can now pass from the stomach pouch into the small bowel. The remaining end of the small bowel (Point A) is attached at Point D, creating a "Y-shaped" intestinal junction. An opening is made at Point D to allow digestive juices from the bypassed part of the stomach to flow into the small bowel.
Adapted from Bray, G.A., Gray, D.S. Obesity, Part I. Pathogenesis. West J. Med. 1988: 149:429-41.