Your brain interprets the two tones as a beat of its own. The two tones align with your brain waves to produce a beat with a different frequency. This frequency is the difference in hertz (Hz) between the frequencies of the two tones.
For example, if you are listening to a 440 Hz tone with your left ear and a 444 Hz tone with your right ear, you would be hearing a 4 Hz tone.
When you listen to binaural beats, your brain activity matches the frequency set by the frequency of the beat. This is called the frequency-following effect. This means you can use binaural beats to entrain your mind to reach a certain mental state.