Nginx and Unicorn: how are they connected to each other?

I just got VM which had nginx, unicorn and a fresh rails app installed. I looked at the nginx config file, and I do not understand how it connects to unicorn, especially since there doesn’t seem to be any upstream setting (which is what most tutorial’s say you need).

Also there seems to be a line in the default site-enabled config file that has the line:

proxy_pass http://app_server;

I am not sure where is app_server defined. Is this an upstream defined somewhere?

Note: This post has screenshots on how all my current configuration files look like:

https://www.digitalocean.com/community/articles/how-to-1-click-install-ruby-on-rails-on-ubuntu-12-10-with-digitalocean