At the next level one analyzes the units from which words are assembled, the "morphemes." These are the smallest units of grammar: roots, prefixes, and suffixes. Native speakers recognize the morphemes as grammatically significant or meaningful. They can often be determined by a series of substitutions.
A speaker of English recognizes that "make" is a different word from "makes," so the s-suffix is a distinct morpheme. This example also illustrates the two kinds of morphemes, unbound (which are meaningful on their own) and bound (which have meaning when combined with another morpheme). Thus, the word "schoolyard" consists of two unbound morphemes ("school" and "yard"), while the word "morpheme" consists, or traditionally consisted, of two bound morphemes ("morph" and "eme"). As the example of "morpheme" reveals, bounded morphemes may become unbounded: "morph" has been adopted in linguistics for the phonological realization of a morpheme, and the verb "morph" was coined to describe a type of visual effect done with computers.
A morpheme may have different realizations (morphs) in different contexts. For example, the verb morpheme "do" of English has three quite distinct pronunciations in the words "do", "does" (with suffix "-s"), and "don't" (with "-n't"). Such alternating morphs of a morpheme are called its allomorphs.