def traceit(frame, event, trace_arg):
    global stepping
    if event == 'line':
        if stepping or frame.f_lineno in breakpoints:
            resume = False
            while not resume:
                print(event, frame.f_lineno, frame.f_code.co_name, frame.f_locals)
                command = input_command()
                resume = debug(command, frame.f_locals)
    return traceit
What is the meaning of the last line in the code?
EDIT:
def remove_html_markup(s):
    tag   = False
    quote = False
    out   = ""
    for c in s:
        if c == '<' and not quote:
            tag = True
        elif c == '>' and not quote:
            tag = False
        elif c == '"' or c == "'" and tag:
            quote = not quote
        elif not tag:
            out = out + c
    return out
def main():
    print (remove_html_markup('xyz'))
    print (remove_html_markup('"<b>foo</b>"'))
    print (remove_html_markup("'<b>foo</b>'"))
# globals
breakpoints = {9: True}
stepping = False
def debug(command, my_locals):
    global stepping
    global breakpoints
    if command.find(' ') > 0:
        arg = command.split(' ')[1]
    else:
        arg = None
    if command.startswith('s'):     # step
        stepping = True
        return True
    elif command.startswith('c'):   # continue
        stepping = False
        return True
    elif command.startswith('q'):   # quit
        sys.exit(0)
    else:
        print ("No such command", repr(command))
    return False
commands = ['s', 's', 's', 'q']
def input_command():
    #command = raw_input("(my-spyder) ")
    global commands
    command = commands.pop(0)
    return command
def traceit(frame, event, trace_arg):
    global stepping
    if event == 'line':
        if stepping or frame.f_lineno in breakpoints:
            resume = False
            while not resume:
                print(event, frame.f_lineno, frame.f_code.co_name, frame.f_locals)
                command = input_command()
                resume = debug(command, frame.f_locals)
    return traceit
# Using the tracer
sys.settrace(traceit)
main()
sys.settrace(None)
                A function is an object like anyone else, so there's no problem in returning itself. For example, it allows repeated calling on the same line:
traceit("abc", "def", None)("ghi", "jkl", 3)("mno", "pqr", 4.3)
Edit: sys.settrace sets the global tracing function, that is invoked every time a local scope is entered to ask for a local tracing function. Here it returns itself, to handle all the tracing in the same function. 
See https://docs.python.org/2/library/sys.html#sys.settrace for details.
Since all functions in Python are created as objects, it returns a reference to the function.
It may be passed into another function later in the code or called with parameters as you could with any function.
def a(str):
    print str
b = a # Assign an instance of a to b
b('hello') # Call b as if it were a
print type(b)
Prints:
hello
<type 'function'>
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