The original signal is "split" into two copies. One copy goes through one effect and the other copy goes through the other effect. You then normally mix them back together. One effect is not really impacted by the other. "What happens" in terms of how it sounds really depends on what effects you're using.
karbo's way is one way to do it, but maybe not the easiest to get your head around at first. Sends to seperate tracks for each effect is maybe a little easier to set up, see, and understand for a noob.
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