Each Smarty tag either prints a variable or invokes some sort of function. Functions are processed and displayed by enclosing the function and its attributes into delimiters like so: {funcname attr1="val" attr2="val"}.
Both built-in functions and custom functions have the same syntax in the templates. Built-in functions are the inner workings of Smarty, such as if, section and strip. They cannot be modified. Custom functions are additional functions implemented via plugins. They can be modified to your liking, or you can add new ones. html_options and html_select_date are examples of custom functions.