The first line invokes the Apple II "System Monitor", the second writes 3 bytes to memory at address $3F2 (the effect of which is to tell the computer to enter the Monitor whenever someone resets the computer from the keyboard), and the rest load binary files into different memory areas. I'm guessing it's all to build an image to be written to disk. (See [2] for more on the System Monitor.)
It looks like he used an Apple II as the development environment, which is straight forward since both machines use the same CPU. The .S files are assembled to 6502 object files. The "makefile" loads each object file to a specific area in RAM, then Download.o transfers the contents of RAM to a waiting Atari 800 via serial connection.
At Broderbund we used Apple II's to develop for both the Atari 800 and the C64. I worked on a cable and software for both ends so we wouldn't have to change systems. It is MUCH faster to develop on one machine, and test on another.
[1] https://github.com/billbudge/PCS_Atari800/blob/master/Disk1/...
[2] http://apple2.info/wiki/index.php?title=System_Monitor#Gener...
EDIT: added additional details