Chuck, the reduction to about 10% ABV and subsequent distillation is the extractive distillation step. It is done to remove certain congeners not otherwise removable because too close in vaporization temperature to ethanol. The mixing of the distillate with hot water enables this. The low levels of congeners remaining in the first run (from the stripper) become insoluble (relatively) by the addition of with water. They collect at the top of the mix and are drawn off. The remaining solution is piped out and purified to high proof in the third column (rectifier).