Autolysis takes place in the dough during the 20 minute break between the first and second kneading.
Bits of flour grow, the dispersed starter feeds intensively causing fermentation, and the dough becomes less fluid and more elastic. During these 20 minutes, the dough essentially kneads itself. Especially if you knead by hand, you can notice that the dough acquires a more delicate, softer, springier texture, becoming easier to work with.
For the yeast to work properly at this stage, the dough must be kept at 23–28°C.
Once autolysis finishes, it’s time for the second (and third) kneading.