CH,Br OH O. NO2 NO2

The nucleophilic substitution reaction involves the reaction of the nucleophile to the carbon (mostly) bearing the leaving group such as halides, triflates, tosylates to furnish a new carbon-nucleophile bond. The 3,4-dihydropyran is a cyclic ether with a double bond. The lone pair on the oxygen is involved in the conjugation with the double bond. Hence the oxygen atom adopts a partial positive charge and the carbon acquires a negative charge. 

General scheme:

Explanation:

On the combination of the substituted phenol and the 3,4-dihydropyran 1, the lone pair on the oxygen attacks the C2 position of the double bond. Simultaneously, the carbanion produced C3 position attacks the carbon bearing the -Br group to furnish the intermediate 2. The intermediate 2 has oxygen that acquires a positive charge and the removal of the proton provides the required product 3.