DS1307 RTC with PIC Microcontroller

With reference to the article Digital Clock using PIC Microcontroller and DS1307 RTC. Can anyone help me with the explanation of setting hour in the switch case 1 ?

// LCD module connections
sbit LCD_RS at RB2_bit;
sbit LCD_EN at RB3_bit;
sbit LCD_D4 at RB4_bit;
sbit LCD_D5 at RB5_bit;
sbit LCD_D6 at RB6_bit;
sbit LCD_D7 at RB7_bit;
sbit LCD_RS_Direction at TRISB2_bit;
sbit LCD_EN_Direction at TRISB3_bit;
sbit LCD_D4_Direction at TRISB4_bit;
sbit LCD_D5_Direction at TRISB5_bit;
sbit LCD_D6_Direction at TRISB6_bit;
sbit LCD_D7_Direction at TRISB7_bit;
// End LCD module connections
 
unsigned short read_ds1307(unsigned short address)
{
  unsigned short r_data;
  I2C1_Start();
  I2C1_Wr(0xD0); //address 0x68 followed by direction bit (0 for write, 1 for read) 0x68 followed by 0 --> 0xD0
  I2C1_Wr(address);
  I2C1_Repeated_Start();
  I2C1_Wr(0xD1); //0x68 followed by 1 --> 0xD1
  r_data=I2C1_Rd(0);
  I2C1_Stop();
  return(r_data);
}

void write_ds1307(unsigned short address,unsigned short w_data)
{
  I2C1_Start(); // issue I2C start signal
  //address 0x68 followed by direction bit (0 for write, 1 for read) 0x68 followed by 0 --> 0xD0
  I2C1_Wr(0xD0); // send byte via I2C (device address + W)
  I2C1_Wr(address); // send byte (address of DS1307 location)
  I2C1_Wr(w_data); // send data (data to be written)
  I2C1_Stop(); // issue I2C stop signal
}

unsigned char BCD2UpperCh(unsigned char bcd)
{
  return ((bcd >> 4) + '0');
}

unsigned char BCD2LowerCh(unsigned char bcd)
{
  return ((bcd & 0x0F) + '0');
}

int Binary2BCD(int a)
{
  int t1, t2;
  t1 = a%10;
  t1 = t1 & 0x0F;
  a = a/10;
  t2 = a%10;
  t2 = 0x0F & t2;
  t2 = t2 << 4;
  t2 = 0xF0 & t2;
  t1 = t1 | t2;
  return t1;
}
 
int BCD2Binary(int a)
{
  int r,t;
  t = a & 0x0F;
  r = t;
  a = 0xF0 & a;
  t = a >> 4;
  t = 0x0F & t;
  r = t*10 + r;
  return r;
}

int second;
int minute;
int hour;
int hr;
int day;
int dday;
int month;
int year;
int ap;

unsigned short set_count = 0;
short set;
 
char time[] = "00:00:00 PM";
char date[] = "00-00-00";

void main()
{
  I2C1_Init(100000); //DS1307 I2C is running at 100KHz
  CMCON = 0x07;   // To turn off comparators
  ADCON1 = 0x06;  // To turn off analog to digital converters
  TRISA = 0x07;
  PORTA = 0x00;
  Lcd_Init();                        // Initialize LCD
  Lcd_Cmd(_LCD_CLEAR);               // Clear display
  // Lcd_Cmd(_LCD_CURSOR_OFF);          // Cursor off
  Lcd_Cmd(_LCD_BLINK_CURSOR_ON);
  Lcd_out(1,1,"Time:");
  Lcd_out(2,1,"Date:");

  do
  {
    set = 0;
    if(PORTA.F0 == 0)
    {
      Delay_ms(100);
      if(PORTA.F0 == 0)
      {
        set_count++;
        if(set_count >= 7)
        {
          set_count = 0;
        }
      }
    }
    if(set_count)
    {
      if(PORTA.F1 == 0)
      {
        Delay_ms(100);
        if(PORTA.F1 == 0)
          set = 1;
      }
      if(PORTA.F2 == 0)
      {
         Delay_ms(100);
         if(PORTA.F2 == 0)
           set = -1;
      }
      if(set_count && set)
      {
        switch(set_count)
        {
          case 1:
                  hour = BCD2Binary(hour);
                  hour = hour + set;
                  hour = Binary2BCD(hour);
                  if((hour & 0x1F) >= 0x13)
                  {
                    hour = hour & 0b11100001;
                    hour = hour ^ 0x20;
                  }
                  else if((hour & 0x1F) <= 0x00)
                  {
                     hour = hour | 0b00010010;
                     hour = hour ^ 0x20;
                  }
                  write_ds1307(2, hour); //write hour
                  break;
          case 2:
                  minute = BCD2Binary(minute);
                  minute = minute + set;
                  if(minute >= 60)
                    minute = 0;
                  if(minute < 0)
                    minute = 59;
                  minute = Binary2BCD(minute);
                  write_ds1307(1, minute); //write min
                  break;
          case 3:
                  if(abs(set))
                  write_ds1307(0,0x00); //Reset second to 0 sec. and start Oscillator
                  break;
          case 4:
                  day = BCD2Binary(day);
                  day = day + set;
                  day = Binary2BCD(day);
                  if(day >= 0x32)
                    day = 1;
                  if(day <= 0)
                    day = 0x31;
                  write_ds1307(4, day); // write date 17
                  break;
          case 5:
                  month = BCD2Binary(month);
                  month = month + set;
                  month = Binary2BCD(month);
                  if(month > 0x12)
                    month = 1;
                  if(month <= 0)
                    month = 0x12;
                  write_ds1307(5,month); // write month 6 June  
                  break;
          case 6:
                  year = BCD2Binary(year);
                  year = year + set;
                  year = Binary2BCD(year);
                  if(year <= -1)
                    year = 0x99;
                  if(year >= 0x50)
                    year = 0;
                  write_ds1307(6, year); // write year
                  break;
        }

      }
    }

    second = read_ds1307(0);
    minute = read_ds1307(1);
    hour = read_ds1307(2); 
    hr = hour & 0b00011111; 
    ap = hour & 0b00100000;
    dday = read_ds1307(3);
    day = read_ds1307(4);
    month = read_ds1307(5);
    year = read_ds1307(6);

    time[0] = BCD2UpperCh(hr);
    time[1] = BCD2LowerCh(hr);
    time[3] = BCD2UpperCh(minute);
    time[4] = BCD2LowerCh(minute);
    time[6] = BCD2UpperCh(second);
    time[7] = BCD2LowerCh(second);

    date[0] = BCD2UpperCh(day);
    date[1] = BCD2LowerCh(day);
    date[3] = BCD2UpperCh(month);
    date[4] = BCD2LowerCh(month);
    date[6] = BCD2UpperCh(year);
    date[7] = BCD2LowerCh(year);

    if(ap)
    {
      time[9] = 'P';
      time[10] = 'M';
    }
    else
    {
      time[9] = 'A';
      time[10] = 'M';
    } 
    Lcd_out(1, 6, time);
    Lcd_out(2, 6, date);
    Delay_ms(100);
  }while(1);
}