Traversing files and directories underneath a directory

Question

I'm looking at some sample code about traversing files and directories underneath a directory. I'm trying to understand exactly what the code is doing. I see that dir.list() is building a string array of filenames and directory names. Then it tests each to see whether it's a directory. If it's a directory then is looks and each file and or directory in that directory.
But I don't understand how it keeps going below just the second level directory. The two lines of code I'm not sure I understand are:
1) process(dir);
2) visitAllDirsAndFiles(new File(dir, children));
Can anyone help me to understand exactly how this code block can traverse beyond just the second directory level?
// Process all files and directories under dir
    public static void visitAllDirsAndFiles(File dir) {
        process(dir);
        if (dir.isDirectory()) {
            String[] children = dir.list();
            for (int i=0; i<children.length; i++) {
                visitAllDirsAndFiles(new File(dir, children));

Answer 1

No, I guess they might be assuming somethings. Here is the page with the sample code:
[http://exampledepot.com/egs/java.io/TraverseTree.html]