And now for the grand finale, the hardware responsible for all of the Surface Dial's many features. The clicky and the spinny.

This microswitch handles the Dial's click function.

As for the spinny function, this component looks awfully similar to the optical sensor in the Nest, that worked just like an optical mouse pointed at the inside wall of the metal casing.

Unlike in the Nest, we find a lightguide, that looks like it bends the light to and from the optical sensor 90 degrees, to avoid mounting the sensor on its own board, parallel to the case.