The Magic Ring (or Adjustable Ring) is used when crocheting in rounds, and should be used for Amigurumi projects. The advantages of using the Magic Ring, is that once tightened, it leaves no hole in the center of your work. It replaces the step of "Ch 2 and single crochet x in the 2nd chain from the hook",
which is the first step in many crochet projects.
If you refer to the main photo, you will see the old method in green, and the Magic Ring in blue.
(Notice there's no hole in the middle of the Magic Ring).
To make the Magic Ring continue on to the next step.
For more crochet instructions, how to read patterns, choose tools & materials, and make a variety of stitches, read my Instructable on How to Crochet: Amigurumi Basics