It is ground up. Calcined gypsum is the heated stuff used to make plaster. If you are asking “what happens to gypsum to make plaster?”, then the answer is that the gypsum is strongly heated to drive off first any physical water (as in soaking wet) then to drive off the chemical water The plaster is then ground. When water is added, it is taken up chemically to form a hydrate which is what we know of as solid plaster and plaster of Paris http://www.gov.ns.ca/natr/meb/ic/ic16.