sprintf format question

sprintf( "%s%$Fmt%s", ("%$Fmt=|", $TestStr, "|"))

This is in Perl for Dummies, 4th ed, p160.

I'm trying to understand this ...

the first part, "%s%$Fmt%s", my understanding is the format part,
which specifies the formats for the second part, thelist part, ("%
$Fmt=|", $TestStr, "|"): %s for "%$Fmt=|", %$Fmt for $TestStr, and %s
for "|", respectively.  Is this correct?

Then what is %$Fmt, it seems a % for format and then a variable $Fmt,
the book did not mention any format string like this ...

Anyone can shed some light?  Thanks!