Your router has two IP addresses. The external one (provided by your ISP) and the internal one (which theoretically only you ever know).
Port forwarding works to send certain requests (to a certain port) from outside the network to a certain IP address within your network. So, say you had a web server on your network, internal address 10.0.0.7, you would need to forward incoming requests to port 80, to this IP address. And that's basically it.