At the very top of the  PVC pipe's upper cap, there's an inlet port and an outlet port.  I've got a gate valve on the outlet port.  Your powerhead delivers water to the inlet port, which is hooked up to the 50 foot plastic coil.  This coil goes all the way down to the bottom of your pvc pipe and is open ended at the bottom.  Bio balls are packed in the middle of the coil.  Here's what happens.  The flow rate is adjusted to 1 - 2 drops per second via the gate valve hooked up to the outlet port.  Over 6 - 8 weeks, bacteria colonize the tube and bio balls.  With such a slow flow rate through the coil, bacteria at the top of the coil will be aerobic, removing oxygen from the water.  this water will be oxygen deprived by the time it slowly flows down to the bottom of the coil, so anerobic bacteria (which convert NO3 to nitrogen) will colonize the bottom of the coil.  As water leaves the bottom of the coil it slowly flows up through the column of bioballs, where the remaining anerobic bacteria are colonized.
Now you realize that the water flow has to stay slow... if you turn up the water flow then oxygen will quickly get delivered down to the bottom of the coil, killing off your anerobic bacteria, at which point you're no longer converting nitrates to N2.
Sorry to be so long winded, but it's rather complex (and I'm a long winded professor by trade!)
BTW Kurt, wow...!  that's a heck of a large sump for a 55 gal tank!  great if you've got the room!