The fan draws air in from the circular hole through the heat exchanger inside (temperature is controlled by the amount of coolant being allowed to flow here) and down into the distribution box. Inside the latter there is a hinged flap that is moved by the dash control knob so that in one position air is directed to the demisters via the hoses or in the other goes straight out of the bottom of the distribution box. In case youre wondering about the rubber flap just under the circular seal, this allows rain water to drain from the air intake chamber but not air in from the engine bay👍