A great way to figure out issues like diving into a source. I found the method in activerecord/lib/active_record/attribute_assignment.rb Check here.
The method assign_attributeswill actually simply iterate over the specified parameters and sends a message to :name=your model. However, since you may be assigning many attributes, it takes precautionary measures into account when assigning a mass. (i.e. make sure the attribute is specified as attr_accessible).