The order of functions
1. checkout/type_onepage object the function “saveOrder()” is called when we press the place order button in checkout page.
2. This calls “sales/service_quote” object “submitAll()” function.
3. This in turn calls the “submitOrder()” function in “sales/service_quote” object
4. In the submitOrder() function, an event gets fired “sales_model_service_quote_submit_before”
An observer for this event is written in ‘cataloginventory/observer’ object which reduces the stock of item.
This is exactly how the inventory decrement occurs, even before the actual order is placed.
And just after the order is saved the event “sales_model_service_quote_submit_success” is called which reindex’s the stock inventory table.