The apical bud produces the hormone, Indole Acetic Acid (IAA) which is also known as auxin. This chemical is produced in the rapidly growing apical bud and is transported down the shoot. Along the way, the IAA passes the lateral buds and the presence of the auxin keeps those lateral buds dormant. Dormancy means that the buds are "sleeping" or "inactive"; there is great potential for growth of the lateral buds but as long as the apical bud is intact, they remain dormant.