This effect combines the original signal with a delayed version of the latter, where the delay time has been modulated (this means that it varies constantly and the rate of its variations is defined by a function, for example, a sinusoid). Let's see what happens in such a situation if we consider a sinusoidal signal:

The upper wave-form is the original signal which we will presume as being formed by sinusoid and the first harmonic. The second wave-form is identical to the first but has variable delay which at its highest is equal to half a semi-wave. So let's now picture the second wave-form oscillating on the horizontal axis between 0 and the position it has in the diagram. When it is at 0, the two wave-forms are in phase and what we have as a result is a reinforcement of all the signal-component frequencies. When it is in its delayed position (as in the diagram), we notice how the first harmonic gets deleted and the second is reinforced. So, the frequency-content of the original signal has been modified. All the intermediate positions act in different ways both on the first and second harmonic. So, summarizing- the phasing effect consists in summing to the original signal a delayed copy of itself in which the delay-time is modulated in accord with a certain wave-form (if the delay weren't modulated we'd have static variation of the original signal's frequency-content. In modulating the effect becomes more interesting).
The following is a sound to which a Phaser effect has been applied.
We can simulate the phaser effect by using two microphones to pick up the same signal. By holding a microphone still whilst moving the other one back and forth in relation to the sound source in cyclic movements, what results is two copies of the same signal- one delayed compared to the other. The backwards and forwarding of the second microphone simulates modulation of the delay-time.
The following diagram shows the logical scheme of a phaser:

Phaser
We can see how the input signal is divided into two parts: the first part reaches the output without being manipulated whilst the second is passed through delay and then mixed at the input signal. Delay-time is controlled by an LFO circuit (Low Frequency Oscillator). Such a circuit consists of an oscillator that is capable of generating low frequency (1 Hz or even less) wave-forms (generally sinusoids). These oscillators are usually used to control the parameters of other effects, as in this case, where the LFO modulates the delay-time (for example, if we modulate with a 1Hz sinusoid, the two signals return in phase every second) between the two signals. We can see how one part of the signal addressed to the output is picked up and sent back to the input. This artifice is used in many other kinds of effects and has the task of further amplifying the applied effect.
The typical controls of a phaser effect are the following:
Rate: the variation-speed of delay-time (the LFO modulator's frequency).
Mix: mixes the original signal and the manipulated signal.
Feedback: controls the amount of applied phasing.




Out-of-phase Sinusoids