The black cable wire is connected to the top terminal on the switch and spliced to the black and blue wires at the fan at the other end. The neutral source and ground are spliced through to the white and ground connections at the fan.
The source hot is spliced to the red wire which is connected to the bottom terminals on the switch at the other end. The black wire is connected to the top terminal on the switch which runs power back to the fan where it is spliced to both the black and blue fan wires.
Use this wiring when the source is at the fixture and you want to control the feed to both components with the same switch. Three-wire cable runs from the fan to the switch box and the source neutral is spliced to the white wire and to the fan neutral.
This diagram shows two switches in the same box with two separate 120 volt sources. Three-wire cable is supplying the source for both switches with the black and red wires going to the bottom switch terminals. The black wire from each light is connected to the top terminal of their respective switch. The white and ground wires are spliced to run to each light fixture.