A rheostat is a variable resistor. The way it works is that there is a terminal at one end of the resistor. The other terminal is attached to a wiper that moves along the resistor. Current flows between the two terminals. If the wiper is moved across the resistor, the resistance in the path of the current will change. The resistor itself often consists of high resistance wire wound around an insulator. As the wiper contact moves from wire to wire of the winding, the resistance changes.