Redistribution is a process in which tokens not auctioned off are redistributed to those that staked (collateralized) the HollaEx token.
During the Wave Auction, any HollaEx tokens (XHT) not distributed in the auction are redistributed to those that staked the HollaEx token in a system called collateralization. This process only takes place in the wave auction for waves that don't get completely distributed in the auction and the amount left gets redistributed proportionally among collateralized exchanges.
HollaEx Kit exchange software users are the majority that collateralizes and they do so in order to run the exchange software.
The redistributed amount is proportionally distributed depending on your exchange slot number which determines the amount needed to collateralize which is covered here.
To collateralize an exchange login to dash.bitholla.com, create an exchange and click collateralize. More info on how to do that can be found here.