The Dalai Lama is the title given to the leader of the Gelug sect of Tibetan Buddhists. The present Dalai Lama is the fourteenth to take on the mantle, though it doesn't really make much difference because they're ALL the same person.
Recently China started bullying Tibet to give in, appointing their own monks, and resorting to force when the Tibetan monks refused to acknowledge the China-appointed monks. The Dalai Lama thus fled to India, and is now there governing Tibet in exile. That's like beating the school bully by transferring schools! Yeah, the Dalai Lama rocks.
Reincarnation is a prevalent in Tibet, and high-ranking monks are reborn just as the Dalai Lama is. Today, there are so many boys who claim to be reborn monks that "Monk" starts sounding like "Tibetan Idol".
So, how do the monks find out which Dalai Lama candidate will be the next Dalai Lama? I like to think they draw celestial straws.