Found this in my 747-400 course notes - hope it helps!
The receiver circuits process the RF signals from the VOR antenna,
which is routed through the VOR/Localizer rf power divider. The
synthesizer tunes the receiver circuits to the selected frequency.
The theory of VOR navigation includes a measurement of the phase
difference between two transmitted signals. One signal is called the
reference (REF) signal; the other signal is the variable (VAR) signal.
The reference signal is an rf carrier amplitude modulated with a 9960
Hz subcarrier. The subcarrier is frequency-modulated +/-480 Hz at a
30Hz rate.
The variable signal is an unmodulated rf carrier directional signal. It
is rotated through 360 degrees at 30 rotations per second. This signal
fluctuation that is received creates the same effect in the receiver’s
detector as a 30 Hz amplitude-modulated transmitted carrier will.
Phase Comparison
The reference 30 Hz signal and the variable 30 Hz signal are
in-phase when the variable signal is aligned with the magnetic north
(000) radial. An airplane on the radial receives both signals in-phase.
On any other radial, the phase difference is equal to the angle of the
radial from magnetic north.