When the parking brake is applied, it moves the lever to mechanically force the brake shoe tightly against the drum on the inside of the rear brake rotor. Parking brake application is completely independent of the hydraulic brake system.
The parking brake handle has an indicator switch which closes when the parking brake is set, thus illuminating the red BRAKE lamp.
Parking brake lever/cable adjustment is automatic. Cycling the lever two to three times should result in properly adjusting the parking brake after disabling it for service.