My best advice is you try to learn a bit about Javascript closures. Really. I might not be the answer you are looking for, but it is the best you can do if you want to understand what's happening there.
Get yourself a copy of any good javascript book. Let me suggest 'Javascript - The Good Parts' by Douglas Crockford.
For some of us, Javascript closures were not something we grokked. I hope it's easier for you.
Anyway, makeAddFunctionis a function creator. It creates new functions which are tied to the parameter you passed to makeAddFunction. Therefore, the addTwo variable receives and stores a new function, which you can invoke later by appending parentheses to it, i.e. addTwo().
The parameter you pass to addTwo, i.e. 1on invokation addTwo(1) is passed to the add function, because addTwo is nothing more than an add function where the amount var has a fix value of 2.