I get how the Crispr matches the DNA and make the cut with its molecular scissors, but after this step, assuming you want to replace in another sequence of DNA at the place where you made the cut, where do you pull that DNA sequence from? Does it just happen to be nearby in the solution?

RNA-guided endonucleases may perform the transcription of the CRISPR array.

 

 

Transcription of the CRISPR array followed by enzymatic processing yields short CRISPR RNAs (crRNAs) that direct Cas protein-mediated cleavage of complementary target sequences within invading viral or plasmid DNA^3-5. In Type II CRISPR-Cas systems, Cas9 functions as an RNA-guided endonuclease that uses a dual-guide RNA consisting of crRNA and trans-activating crRNA (tracrRNA) for target recognition and cleavage by a mechanism involving two nuclease active sites that together generate dsDNA breaks (DSBs)^6,7.

 

https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4106473/