In a single chip projection system, color is added as light passes through a high-speed color wheel and is reflected off of the micromirrors on the DLP chip as they rapidly tilt towards or away from the light source. The degree of tilt of each micromirror coupled with the rapidly spinning color wheel determines the color structure of the projected image. As the amplified light bounces off the micromirrors, it is sent through the lens and can be projected on a large screen.
In more advanced projection systems that use a 3-Chip design (one chip for Red, one chip for Green, and one Chip for Blue) the spinning color wheel is not required.
See also, DLP