Dagger2 generates code to handle dependency injection behind the scenes. It creates classes like DaggerBreadShop to manage component bindings and factories like BreadModule_ProvideBreadFactory to retrieve dependencies. When a dependency is requested, it uses the factories to resolve the dependency by delegating to the corresponding module method, such as BreadModule::provideBread, which creates the actual instance. For singleton scopes, it caches the instance rather than creating a new one each time. When injecting dependencies into objects, it generates members injectors like Lunch_MembersInjector to set the dependencies directly.