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Phase 1 - BIOS

When a PC-AT is first powered on (not "wake from sleep"), a program in Read Only Memory (ROM) called the BIOS (Basic Input/Output System) runs a short program called a Power-On Self Test (POST). This basically just performs minimal initialization of all connected hardware so that that the devices can be accessible to the next program to be run by the Central Processing Unit (CPU). Some BIOSes will perform a comprehensive series of tests, or can be configured to do so; however most test little more than the amount of memory installed and which "disks" are accessible. If the computer was purchased from a major company (Dell, HP, etc.) it will probably show a logo and no POST information will be displayed unless there is an error or you press a special key. If the computer was built by a smaller company or individual, there probably will not be a logo displayed during POST.

Originally, the PC would boot from a floppy disk. As the PC evolved, more devices became available: hard disks, optical discs, network card, memory card ("thumb drive"). If multiple devices exist, the BIOS will generally try to boot the first one that has valid media. However this order of devices varies between different computers, and even on the same computer the user is often able to change this order by accessing a special "BIOS Setup" program. This is done by pressing a specific key during POST. There is no standard... different keys are used by the many vendors and even the same vendor may use different keys on different models! If you are lucky the BIOS will print a message during POST telling you which key to press, and hopefully you will be fast enough to read it!  If not, you can try some of these "popular" keys: ESC, F1, F10, F12.  Note that Windows tests for F8 so the BIOS usually does not.
If you are having start-up problems, it could be the BIOS is getting "stuck" on another device.  Maybe there is a CD/DVD inserted or thumb-drive connected and the BIOS is trying to boot that instead of what you want (usually the first hard drive).  BIOSes generally will not let you boot from every device.  For example, many will allow you to boot only from the first hard drive, even if it detects two or more.  Also, it may not let you boot from a memory card, thumb drive, or ethernet (network boot is quite rare).  It really depends on the BIOS author (which is almost never the computer manufacturer).  Sometimes you can upgrade the BIOS to allow more devices, but if the computer won't boot, it would be almost impossible to upgrade!  In case it isn't obvious, you can't boot from the keyboard, display, or mouse :)
If you change the boot order, you might need to save the changes and restart.  With some BIOSes, you can change the boot order "on the fly" (at the end of POST) which is temporary.  If you need or want to save your changes, the BIOS should tell you how (again this varies greatly so you'll have to read your specific documentation or experiment with the BIOS Setup menus).  The changes are stored in non-volitile memory (flash memory or battery-backed memory)... the BIOS and some sources may call this CMOS which is just plain stupid.  Almost all chips in the PC are CMOS; Complementary Metal Oxide Silicon is a chip fabrication technology, not a storage device!
Some devices, particularly network cards, have ROM that the BIOS will execute at the end of POST but before trying to read from any media.  This device may print a message to access its setup menu.  For a network card, the message may refer to PXE (Pre-boot eXecution Environment) settings.  Again, this will vary between computers.
Now that the BIOS has selected the media to boot, proceed to Phase 3 if using a hard drive, memory card, or thumb drive; to Phase 4 if using a floppy drive; or to Phase 2 if using a CD/DVD.  Network / PXE boot is not covered here; refer to this Wikipedia article.
If no device with bootable media is found, the BIOS will usually halt at this point with a message like "NO DRIVE. INSERT DISK.  PRESS ANY KEY."  On some systems, inserting an optical disk or attaching a USB drive at this point will not be recognised no matter how many times you press any key.

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