Simple example: in an OOP language you might have a Map<K, V> class for any type K, V where K must be an instance of an Ordered interface so that the map implementation can do efficient lookup.
In OCaml, you have a Map.Make(Ord : Ordered) functor which explicitly takes a module Ord as its parameter. The Ord module implements the key data type, which must support the Ordered interface. When you (statically) apply the functor, you get back a new module which specializes a map data type to work for the specific key type. E.g.,
module StringMap = Map.Make(String)
The String module implements the Ordered interface, so it can be used as the argument here. Now you can create and manipulate maps of strings to any values.You might be wondering, what's the payoff? It's very similar to the payoff for interfaces--code abstraction. It's just that it's all statically resolved and highly efficient.