The magician shows three blocks, one labeled A, one labeled B, and one labeled C.  
 
The blocks are removed from their stand and placed into a hat.  The stand is then shown to be solid and a rectangular tube is also shown to be solid and empty.  
 
The blocks are then removed one by one from the hat in reverse order ("C" first) and placed back onto the stand.  The rectangular tube is then used to cover the blocks.  
 
After a few magic words, the tube is removed and the center block ("B") is seen to have disappeared!  
 
The magician then reaches back into the hat and shows that the "B" block has returned to the hat!  The hat is then shown empty.