Building a phone-based jukebox that plays happy SEGA music to relive the feeling of MAGFest is a project that combines Ruby, Sinatra, and Twilio. The project involves creating an Interactive Voice Response (IVR) system that allows users to dial in and listen to their preferred SEGA soundtracks. To build this system, developers need to install dependencies like Twilio-ruby and sinatra, then copy and paste the provided code into a new file called app.rb. The system uses ngrok to generate a custom forwarding URL for public access and configures a phone number to send POST requests to the app whenever it receives a call. Once set up, users can dial in and listen to their preferred SEGA music, creating a nostalgic experience reminiscent of MAGFest.