When going with smaller implants, how does the Dr. make the cavity smaller to hold smaller implants?

The implant space, if placed under the muscle, is usually made a little larger than the implant itself so the implant moves around a little and feels soft.

Assuming you do not have any extra skin to address, a closure of the pocket with sutures along the lateral and lateral inferior extent of the implant pocket is performed to create a smaller space. This will allow the smaller implant to sit more medially and prevent it from falling out to the sides.  I typically use a permanent suture, such as a 2-0 Prolene.  

When decreasing the volume of the breast implant a number of techniques can be used depending on the presentation of the breast and the amount of reduction in implant volume.Simply going down in profile without changing the implant diameter may eliminate the need for any pocket manipulation. More significant reductions can require suture techniques to make the space smaller.Seek out a board certified plastic surgeon to evaluate you and review your options. I hope this was helpful.