In the lamda calculus there are only three main rules.

1. Variables x,y,z are just values
2. Abstraction (functions): λx. x + 1 means a function which takes x and returns x+1
3. Application (function call): (λx. x + 1) 5 => call this function with the argument 5

1(λx. x) 42     -- Identity function, returns 42  
2(λx. λy. x + y) 3 4  -- add 3 and 4, returns 7  
3