Milk contains a special type of protein called casein. When milk sours, or has an acid such as vinegar added to it, the casein clumps together to form curds. The watery liquid that remains is called whey.

Normally these curds of casein protein are used to make cheese. The protein in milk curdles because it has been denatured by the vinegar. What this means, simply, is that the shape of the protein molecule has shifted due to the acid environment caused by the vinegar. A protein is a long chain of units called Amino Acids, each with a different chemical "group" attached to it. These different groups cause the long chain to twist and tangle in a certain way that gives the protein certain qualities and behaviours. In an acid environment, these groups change slightly, or their tendencies to be attracted to other groups changes, and so the protein twists in a different way. This is what causes the transformation into plastic like curds.