You can see this in action on musl source code, which is arguably a much more readily understandable implementation of libc:

- Function that actually parses /etc/hosts is name_from_hosts(), implemented here: http://git.musl-libc.org/cgit/musl/tree/src/network/lookup_n...

- Which is called by __lookup_name() on the same file: http://git.musl-libc.org/cgit/musl/tree/src/network/lookup_n...

- Which is, in turn, called directly from getaddrinfo() [http://git.musl-libc.org/cgit/musl/tree/src/network/getaddri...], the actual function exposed to you as libc user.