The initial Variogram report shows a plot of the empirical semivariance against distance. For additional background and details, see Antedependent Covariance Structure.
The curves for the theoretical models are fit using the covariance parameter estimates. For the underlying formulas, see Chilès and Delfiner (2012) and Cressie (1993).
The nugget is the vertical jump from the value of 0 at the origin of the variogram to the value of the semivariance at a very small separation distance. A variogram model with a nugget has a discontinuity at the origin. The value of the theoretical curve for distances just above 0 is the nugget.