(c) 2008 Andrew Alden, licensed to About.com (fair use policy)
Folding is a deep and complex subject in geology. Drag folds are one of the simpler types of fold. They occur in conjunction with faults, and they represent the bending of rock before it breaks. In this example the fault is a thrust fault with the top side (the hangingwall) moving to the right, and the bottom side (the footwall) displays drag folding. Probably the folding occurred when the rock was deeply buried. Later, when the rock was being uncovered during its rise to form the Oakland Hills in the San Francisco Bay area, further movement on the fault shattered the rock in the hangingwall and destroyed its drag folds.
It may seem, intuitively, that the rock in a drag fold is bent by being dragged along the fault surfacehence the namebut in fact drag folding must precede the actual breakage of the rock in a fault. Like everything else, rocks prefer to bend first before they break. In most cases, the direction of folding is toward the direction of movement on the fault.