In this mode, the multimeter sends a little current through one probe, and measures what (if anything) is received by the other probe.

If the probes are connected—either by a continuous circuit, or by touching each other directly—the test current flows through. The screen displays a value of zero (or near zero—in this case, 0.8). Very low resistance is another way of saying that we have continuity.

If no current is detected, it means there's no continuity. The screen will display 1 or OL (open loop).