Hands On:

1) Measure out about 12” of 1/2” vinyl hose.
2) Using the method described in TECHNIQUE – TONE HOLES, create one hole in the vinyl tube about halfway down the tube.
2) Connect the tube to a mouthpiece and try playing the instrument with the hole open or closed.

Simple Explanation:

Tone holes work by effectively shortening the vibrating length of the tube. If you recall from Pipe Lengths, the longer the pipe, the lower the pitch. And the shorter the pipe, the higher the pitch.

If you create a tone hole that is the diameter of the pipe itself it will create a sound that is the same as though the length of the pipe came up to the center of that tone hole. If you create a smaller hole, the pipe will sound as though it is a bit longer than the center of the tone hole. The exact placement and size of the tone holes is something that instrument makers spend a lot of time working with the exact positioning and size of tone holes.

Further Experimentation:

Try placing multiple holes into your tubing. If you don’t like the location of a hole, you can always use tape to cover it up.

Further Learning:

ToneHoles
http://newt.phys.unsw.edu.au/jw/clarinetacoustics.html#toneholes