Hooray, you're out of the classroom! By now you've passed (or will soon pass) your first Board Exam, and are on your way to being an actual licensed physician. Start getting comfortable with patient contact because you'll have a lot of it. And that's good - this is when you'll start to get an idea of what specialty is a good fit for you.
Year 3 consists of clinical time in the hospital or office (clinic). 2- or 4-week rotations in a variety of specialities, to include surgery, OB/GYN, family practice, internal medicine, pediatrics, psychiatry, etc. There are some specialties which are required, some you do multiple times (in different settings/ with different physicians), and a few electives you can choose from. You still study, there is required reading, you'll give presentations in some of them, and a few have exams afterwards.
On top of all this, you should be prepping your residency application, including the dreaded personal statement. FYI - think of the residency process like a job application/ interview. The biggest one you'll ever do. Residencies vary in length from 3 years to 5 years, and while you do get paid, it's a pittance when weighed against the hours you'll be working. I'm not complaining before the paychecks start rolling in, I'm just saying that $42,000 a year is small recompense when you're spending 3-5 years working 70 hours a week of days, nights, weekends.
Boards, boards, boards: If you're a DO, you'll take your Step 2 computer-based exam & fly to Philadelphia for the Physical Exam portion. Oh, and don't forget to budget for the $2,000 this will cost you. If you're an MD, you take Step 2 of the USMLE, and it's also a 2-part exam similar to the above.
You will also probably schedule some "away" or "audition" rotations at hospitals with residency programs you think you might want to apply to. Some students spend months away from their home base. There are required rotations for the 4th year, but there is also much more flexibility in choosing electives and filling in the weeks needed to graduate.
In July or September (depending on whether you are applying to DO or MD programs), you will submit your residency application to the programs you've chosen. And then you'll wait to hear back from them. You may get no interviews, you may be asked to interview at every program you apply to. Some programs interview as few as a dozen people, while others go through hundreds. Interviews usually consist of dinner the night before, then various one-on-one and group interviews the day of. If you don't have dinner with the residents the night before, you will probably have lunch with them the day of. If you didn't do a rotation there, this is the only chance you have to show and tell why you'd be a good fit with their team. Interview season usually ends in mid-January, and at that time the student and the programs submit their Rank Listings for The Match. Programs accept between 1 and 16+ residents, and some programs participate in separate matches (urology, opthomology, dermatology).
Residency Match: The student submits a list of programs where they would like to enter into a residency. This is the Rank List. The list should be in order of most desirable to least desirable. BUT if a program is on the list, there is the potential to match into it, so be sure you are OK with going there if you match. Each residency program also submits a list of students they would like to come to their program, in order of preference. This is a blind process, so neither the students nor the programs know where they stand. When The Match occurs (February-DO or March-MD), the ERAS computer system magically cross-references all the lists, and is somehow able to (supposedly) make a 90% match to both the student's and the program's preferred outcome. Shortly thereafter a work contract is sent to the student, and yes, you are contractually obligated to enter the residency program you matched into.
The Scramble: If you don't match, you participate in The Scramble. The Scramble is a process wherein the schools distribute a list of the programs who did not fill all their spots in The Match. The student then contacts the programs and essentially throws their hat into the ring to fill that spot. This may mean you end up in a location you did not interview at, or possibly in a specialty that was not your first choice.
Worst case scenario: If you don't match & can't scramble into a spot, you can do an internship year and then either slide into a spot, re-Match, or take your final Board exam and begin practicing medicine without completing a residency. EDIT: I now know that at least a 1 year internship has to be completed before a full medical license will be issued.
Whew! "The end" is in sight, but some days it still looks like a mirage.