What it does is speed up (or slow down) the emulated cpu. Example benefits would be overclocking in Double Dragon to get rid of the slowdown (that happened on the real boards) or underclocking cpus on something like Dodonpachi to add more slowdown if you wanted it to be a little easier while you practice or something. But it is a cheat and could cause a glitch. There are certain cases where a game may not need anywhere near its original cpu/mhz to run full speed, and the game would run the same speed even at ~half the mhz, and your PC cpu can't handle it at its natural mhz and underclocking the emulated cpu would actually make the game run full speed on your computer with this hack by making your PC cpu not have to work so hard. Yes that is possible.
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