Check out the function bindReady in the source code.
They bind to the DOMContentLoaded event (or onreadystatechange on some browsers). They also have a fallback to the regular load event, in case the DOMContentLoaded isn’t supported or not fired for other reasons. On browsers supporting it, they use this call:
document.addEventListener( "DOMContentLoaded", DOMContentLoaded, false );
On IE <9:
document.attachEvent( "onreadystatechange", DOMContentLoaded);
The second instance of DOMContentLoaded in these calls is their own function – actually a reference to the ready function right above bindReady in the source code. This function will check that the DOM tree is actually done by checking for document.body. If it doesn’t exist yet, they wait a millisecond (using setTimeout) and check again. When document.body exists, they traverse the list of callbacks you’ve set.