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The init directory of Linux 0.01 contains one file, main.c, which implements the init process. This initialises the system clock from CMOS, starts the tty device, the system traps, the scheduler, the file system, and the hard disk interrupt handler. Then it enables interrupts and switches to user mode. Finally it calls the function init() and goes into a scheduler loop.
The init() function calls setup(), which examines the hard disk partition tables. Then it forks a child to run update(8) [rtfm]. Then it forks another child which creates a new session and uses execve() to open a login shell with HOME set to /usr/root.