ok, it's a bit rough as i just threw it together on paint, i'll try to explain it as well to help you understand...
the mainline goes through the tube in the lead, then through a small piece of rubber tubing that is attached to a tulip bead, this presses over the swivel to hold it in place, the swivel is tied to the mainline and your hook-link..
Theory is, as the fish pick's up the bait, the lead move's up off the bottom, if the fish tries to blow the bait out, the lead drop's and pulls the hook into the bottom lip...
if the fish picks up the bait and move's away, the lead causes resistance on the line which pull's the hook into the corner of the mouth as it move's away.
don't use anything other than the tulip bead to hold the lead in place though, if the like break's the tulip bead is easily removed from the swivel as the fish tries to shake it off, so it's left only pulling the hook-link, if you use a lead shot or something similar (or you pass the line through the lead twice) it will make the lead a lot harder to come off, so the fish end's up dragging this around and could snag up, possibly causing the fish to die... hope this help's