Tor works by ensuring that there is three Tor relays between the Tor client (the software that connects to the Tor network) and the destination the Tor client is connecting to.
However, what happens when you want to establish a connection between two hosts who are both using Tor through the Tor network? Well, in that case both Tor programs establish a path through three Tor relays and link the last Tor relays in each of their separate chains together (if you are interested in learning about how each Tor program knows the others end point look up "Tor hidden service directory"). Now with both ends of their Tor relay chains linked, both hosts can communicate with each other securely and anonymously over the Tor network. (For example: you are using Tor browser to connect to a hidden service. Both Tor browser and the hidden service make a chain of three Tor relays each and connect the chains together through the last node of each chain. The Tor browser only knows the relays that it uses for its chain + the end of the hidden services chain. The hidden service only knows the relays in its chain + the last relay in your chain. Thus keeping you both anonymous.)
I hope this helps!