By little elves.

Actually, no. It's a combination of high technology with precision machinery (most are machine cut, rather than cut by hand, AFAIK) and the fact that the laws of optics work quite independently of scale. Funnily enough, some people would rather use single cut diamonds rather than full cut below a certain size (1.5 mm or so), because then the facet size (and sparkle) is too small with a full cut, but it's now rather difficult to find well made single cut melee

That is simply incredible.  It was really hard to picture the cut done by hand.  The shine from diamonds are magic, even with the little guys.

I learned a new word: melee