A sequential turbo works by having 1 spool earlier, and the second gradually gets its spool as the ECU allows more and more exhaust gasses to pass through it untill its at full spool. It gives pressure to actuators which open and close VSV valves which tell it to pass boost pressure or stop it.
^-summary for those who dont want to read this
Somewhere around 3500 rpm in a toyota supra, the ECU sends a signal to the exhaust gas bypass valve VSV, which allows manifold pressure to build in the exhaust gas bypass valve actuator which opens the bypass valve. This is a small opening inside the #2 turbine housing which allows some exhaust gas to go through the turbine of the #2 turbo which makes it start spinning, and dumps the exhaust gas out the exhaust piping coming off of #1 turbo. Since it is a small amount of exhaust gas, it pre-spools the turbo and does not get it up to full operating speeds. This will smooth out the transition from 1 to 2 turbos. This valve is similar to a wastegate in design, but is located after the turbine wheel instead of in front of the turbine wheel like a wastegate would be. This is not a wastegate.
the Exhaust Gas control valve is located in the exhaust piping downstream of the #2 turbo. When this valve is closed, all exhaust gas must go through the #1 turbine wheel to get out through the rest of the exhaust system. At around 4000 rpm, the ECU sends a signal to the exhaust gas control valve VSV, which allows manifold pressure to build in the exhaust gas control valve actuator which opens the control valve. This allows exhaust gas to go through #2 turbo and out the exhaust system which brings the #2 turbo up to full operating speed and make full boost.
The intake Air control valve is located in the intake tract coming off of #2 turbo. It is closed below 4000 rpm so that boost pressure coming off of #1 turbo cannot backup through the #2 turbo and back out the air cleaner/suction of #1 turbo. There is also a 1 way reed valve within the same housing of the intake air control valve. As the #2 turbo starts to prespin at 3500 rpm, it will build some boost. If it builds enough boost, it will open the 1 way reed valve to allow this boost into the intake tract to join with the discharge boost pressure coming off of #1 turbo. At somewhere over 4000 rpm, the ECU sends a signal to the intake air control valve VSV, which allows manifold pressure to build in the intake air control valve actuator which opens the control valve. This allows the full boost pressure coming off #2 turbo to join in with that coming from #1 turbo and you are now fully on line. Usually, the exhaust gas control valve will open first, which gets the #2 turbo spinning at full rate so that it is building good boost before the intake air control valve opens, allowing this boost to join in with that coming off #1 turbo. If the intake air control valve opens before the exhaust gas control valve, the boost pressure coming off #1 turbo will go backwards through #2 turbo, spinning it backwards if there isn't sufficient exhaust energy to keep it spinning forward. When the exhaust gas control valve opens, and the #2 turbo has to reverse the direction of the spin. This is a tremendous strain on the turbo shaft and bearings. If the sequential operation is not a well orchestrated symphony of motion, it is easy to see how the #2 turbo is the one that always fails.
VSV - short for vacuum switching valve. It is just an electronic solenoid, which either opens or closes 100% when energized. This will allow the VSV to either pass boost pressure through it from the actuators(like the wastegate actuator) or block it off.
That, ladies and gentlemen, is how a sequential twin turbo setup operates..
