Degaussing uses an electromagnet (coil and often a core) powered by alternating current. When in the proximity of ferrous metal, the degaussing coil induces magnetic lines of flux first in one polarity and then in the other, alternating typically 60 times a second (60 Hertz).
To use a deguassing coil, one should energize it (plug it in or turn it on) away from the item to be demagnetized. Then approach the item, moving the coil in a circular motion as you "sweep" the item. Direction of circular motion and direction of movement are pretty much irrelevant, just so long as the entire magnetized area is covered. Then, and this is important, you move away from the item slowly (speed is unimportant) and only turn off the coil when you are a few feet a way (distance dictated by the size and strength of the coil). Turning off the electromagnet (coil) when close will leave magnetism in the item.
Pretty simple, actually, not magic at all. Except for those really big coils they used to use to demagnetize ships so they wouldn't trip magnetic mines
