Webpack works by generating a dependency graph of assets in a set of source files, which it transpiles an optimized set of distribution files from. These source and distribution files contain source code and distribution code, respectively. This distributed code forms the output. Distribution is simply another name for the output or bundle.

Webpack begins by finding an entry point in the source files and from there, it builds a dependency graph. The selection of an entry point is optional in Webpack 5 and the choice of selection will alter the nature of the build process, either in terms of speed or output optimization.

Webpack 5 is capable of transforming, bundling, or packaging just about any resource or asset.

We have covered a good overview of how the software works; experienced users of previous Webpack versions may consider this overview rudimentary, so let's have a look at what is new in this current version.