File chaining
  FAT tracks files by maintaining a linked list of entries for each file.
    The index or id of entry matches the cluster id of file's data.

  User readable directory file contains an index that points to the first
  cluster of the file and co-responding entry in the FAT table.

  ID used to locate the beginning of the linked list in FAT.
    OS, BIOS, and hardware translates cluster id to CHS or LBA.

  The FAT entry idexed by the directory entry contains the index of the
  next cluster on the drive partion and tne next entry in the FAT table.

  Special fat entries indicate:
    Current cluster is end of file (EOF) : 
     FF8h - FFFh fat12.
     FFF8h - FFFFh fat16.
     ?FFFFFF8h - ?FFFFFFFh fat32.

    Current cluster is unused and available :
     000h fat12.
     0000h fat16.
     ?0000000h fat32.

    Value 1 is also reserved and for system use.

    Current cluster (sector) is bad :
     ff7h fat12.
     fff7h fat16.
     ?ffffff7h fat32.

    Current cluster is node of file (EOF) : 
     002h - FEFh fat12.
     0002h - FFEFh fat16.
     ?0000002h - ?FFFFFEFh fat32.

    All others reserved.
 
Example

  
The OS had to parse the FAT link table each time it needed an open cluster.