Once source code is fetched and unpacked, BitBake locates patch files and applies them to the source files:

The do_patch task processes recipes by using the SRC_URI variable to locate applicable patch files, which by default are *.patch or *.diff files, or any file if "apply=yes" is specified for the file in SRC_URI.

BitBake finds and applies multiple patches for a single recipe in the order in which it finds the patches. Patches are applied to the recipe's source files located in the S directory.

For more information on how the source directories are created, see the "Source Fetching" section.