How we change what others think, feel, believe and do
A fold in a story happens when it suddenly changes direction.
This typically happens when the hero realizes that they have been heading in the wrong direction, following the wrong clues, trusting the wrong people, etc.
Sometimes the fold happens when a complete story ends and another starts as a result. Thus there is less a change of direction and more a revealing of 'more things to do'.
The result is that there is effectively two (or more) sub-stories within the main story.
The detective discovers evidence showing that the chief suspect is innocent, trigging a whole new line of investigation.
A treasure-seeker finds they have the wrong map and are looking in the wrong place.
After rescuing the maiden and returning her to her father, the hero has to go another mission before he is permitted to marry the maiden.
When the audience knows that the hero is on the wrong track, the fold arrives as a relief. If they audience does not know this, then the fold acts as a surprise.
Many great stories have folds in the middle.
The fold is very similar to Reversal in that it keeps the reader guessing.