The tunnel fin has several interesting attributes. One is that it provides lift in the same plane as the surfboard hull, just as a winged fin does. It does so much more efficiently than a winged fin however, and with better control. By adding a lifting foil under the hull, we get a similar effect to having a wider tail but get to keep a narrower tail for control.
With a wide tailed board control becomes an issue at speed due to the fact that planing lift increases exponentially as speed increases, and this makes the rail of the wide tailed board harder to sink into turns due to the leverage required. Using a narrow tailed board with a tunnel to produce the same amount of lift as the wide tailed board, rail to rail rolling remains easy even as speed increases, due to the shape of the tunnel which does not resist such movement. The result is ease of control and predictable handling characteristics.
With a wide tailed board and a big tunnel, a massive amount of lift is produced in the tail area, which is useful for smaller waves.
The tunnel is completely neutral in its handling as it has almost zero resistance to rail to rail roll. It's also a very low drag fin, due to the absence of tip drag ( no fin tip) and because the lift is produced at low pressure ( the tunnel uses a large volume of water at low pressure rather than a low volume at high pressure as planar finds tend to do. This reduces drag. There's also a subtle spiral vortex produced through the tunnel when the board turns, this also reduces drag in a similar way to the tubercules on the main fin.
The effect is of much more drive and power, and improved speed.
Tunnels can be large or small depending upon the width of the tail. With sufficient tail width a large tunnel can be used which works alone without other fins. Even a small 4 inch diameter tunnel has a lot of power once it gains speed. They work best on boards with a long flat tail rocker.
Pressure gradients on planing hulls show high lift at the front of the hull, this tapers off dramatically towards the tail, so that the tail more or less trails behind without producing a lot of lift. This gives the typical soft feeling to the tail on boards without horizontal fin area like singlefins. By placing a horizontal foil under the hull near the tail which works in undisturbed water flow, another high lift area is produced there. This gives the tail more drive and the creation of two lift areas is rather like having two axles on a skateboard rather than one. Other boards with fin based vertical tail lift via horizontal area include all those with canted side fins, as well as star fins and other fins with horizontal wings attached. In my opinion the tunnel is far superior to canted fins, having lower drag and better handling.
http://olosurfer-woodensurfboardsatpipeline.blogspot.com/2009/03/wonderful-tunnel-fin-celebration.html