When you drag a source clip to the timeline or move a segment to another location on the timeline, the shot is placed on the track directly beneath the cursor. If you drag a shot below the last track on the timeline, a new track is created. You can drag entire source clips as well as specific frames to any location on the timeline.
You control where your shot will be placed on the timeline using Snap options and whether your edit sequence changes duration by setting the Ripple mode.