In this video, the teacher explains how to read dialogue fluently by using punctuation as signposts. By paying attention to punctuation marks such as question marks, exclamation points, commas, and quotation marks, students can better understand the meaning and context of the dialogue. The teacher demonstrates how to circle and highlight the punctuation, consider the character's voice and who they are speaking to, and match their voice accordingly. This approach helps students read dialogue with more expression and clarity.