how does command passwd work resp. which else commands does it involve?

how does command passwd work resp. which else commands does it involve?

Have thought that command passwd uses for encryption of input the command
mcrypt ?
But instead it is crypt resp. encrypt ? Source-code of crypt/encrypt is
not available ?
What should I examine now, when I want to know, which commands passwd is
involving ?
When am not confusing this - then in earlier times of Linux passwd was
using command mcrypt ? - Who can enlighten me ? -thx.
Am asking this, because I want to pimp up my password-possibilities ...