What is the $1 in class file names?

C:\Program Files\Java\jdk1.6.0_05\CoreJava\v1\v1ch2\WelcomeApplet>dir
 Volume in drive C has no label.
 Volume Serial Number is 2041-64E7

 Directory of C:\Program Files\Java\jdk1.6.0_05\CoreJava\v1\v1ch2\WelcomeApplet

2009-07-02  23:54              .
2009-07-02  23:54              ..
2004-09-06  14:57               582 WelcomeApplet.html
2004-09-06  15:04             1,402 WelcomeApplet.java
               2 File(s)          1,984 bytes
               2 Dir(s)   2,557,210,624 bytes free

C:\Program Files\Java\jdk1.6.0_05\CoreJava\v1\v1ch2\WelcomeApplet>javac WelcomeApplet.java

C:\Program Files\Java\jdk1.6.0_05\CoreJava\v1\v1ch2\WelcomeApplet>dir
 Volume in drive C has no label.
 Volume Serial Number is 2041-64E7

 Directory of C:\Program Files\Java\jdk1.6.0_05\CoreJava\v1\v1ch2\WelcomeApplet

2009-07-02  23:54              .
2009-07-02  23:54              ..
2009-07-02  23:54               975 WelcomeApplet$1.class
2009-07-02  23:54             1,379 WelcomeApplet.class
2004-09-06  14:57               582 WelcomeApplet.html
2004-09-06  15:04             1,402 WelcomeApplet.java
               4 File(s)          4,338 bytes
               2 Dir(s)   2,557,202,432 bytes free

C:\Program Files\Java\jdk1.6.0_05\CoreJava\v1\v1ch2\WelcomeApplet>

Here is the content of that Java file:

/**
   @version 1.21 2002-06-19
   @author Cay Horstmann
*/

import javax.swing.*;
import java.awt.*;
import java.awt.event.*;
import java.net.*;

public class WelcomeApplet extends JApplet
{
   public void init()
   {
      setLayout(new BorderLayout());

      JLabel label = new JLabel(getParameter("greeting"), SwingConstants.CENTER);
      label.setFont(new Font("Serif", Font.BOLD, 18));
      add(label, BorderLayout.CENTER);

      JPanel panel = new JPanel();

      JButton cayButton = new JButton("Cay Horstmann");
      cayButton.addActionListener(makeURLActionListener(
         "http://www.horstmann.com"));
      panel.add(cayButton);

      JButton g