There are two methods of coating pans with Teflon - mechanical and chemical.
Mechanical Bonding: First, the surface of the pan is sandblasted. Then it's coated with a primer. Then Teflon particles are embedded in the primer - which forms a stable medium for them. The coatings are cured at a very high temperature.
The Teflon works by shedding particles of PTFE which migrate to the surface, and which keep anything from sticking to it.
Chemical bonding is a newer process which used three coats. The aluminium pan has to be very smooth, with no oxides or salts. The primer forms a chemical bond with it. The second coat consists mostly of PTFE, and the thrid coat is a clear PTFE which sticks to the second coat.