The idea of this meme is simple: you quote a post that contains obviously false information (or an opinion that you disagree with), and reply to it with a reaction image (preferably Link clasping his hand over his mouth). However, there is a catch: the filename of said reaction image must be incorrect. In this example, your filename would be "Laughing Elf Man.jpg".
After this, you quote the post with the incorrect filename (along with the filename itself), and respond with yet another incorrectly-named reaction image. Then, you respond to THAT post with ANOTHER misnamed reaction image, and so on. Repeat this process until the thread is successfully derailed, or reaches the image limit.
Some /v/irgins claim that filename threads are an unfunny forced meme perpetuated by a single person. However, there is one rather simple way to do a samefag check: if there are two or more misnamed reaction images replying to the same post, then one can assume that there are multiple people engaging in the derailment of the thread.
Filename threads will most likely continue to run rampant until moot devises a way to keep the goddamn filenames hidden.