Essentially when flying along doing something else, you close the throttle (and if applicable open carb heat), then simulating engine failure (time permitting) run through any RT calls you'd make, perform essential checks (canopy and harness mostly) whilst picking a suitable field for an emergency landing and setting up for it as if to land.
As you'll see from the two threads I'm guilty of starting, there is some debate about how often one should do PFLs, and at what height it is realistic or safe to initiate go-around at the end of the exercise.
G