Derek and Zak confirm they are talking to each other using the Diffie-Hellman protocol. Zak then encrypts a secret message using RSA encryption, which Derek then decrypts.

https://en.wikipedia.org/wiki/Diffie%E2%80%93Hellman_key_exchange

https://en.wikipedia.org/wiki/RSA_(cryptosystem)

The Art of the Problem has a fantastic pair of videos on YouTube explaining how these encryption methods both work.

Diffie-Hellman: https://www.youtube.com/watch?v=YEBfamv-_do

RSA Encryption: https://www.youtube.com/watch?v=wXB-V_Keiu8

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Zak on Twitter @phyzaks: https://twitter.com/phyzaks