If one has to apply for a university, and he only have the resources to choose one school to apply to, he can choose his dream school which he has little chances of getting in, and if rejected he can only go to the safety school he hates, or he can choose to apply to a school he has much more possibility of getting in, but he doesn't like it as much as his dream school. Most applicants would choose to go to the school that is not his dream school, but he still has possibility of getting in.
In this case, the dream school that has little possibility is the 3rd candidate that has little chance of winning the election. The safety school that is the result of the failure of applying to the dream school (voting for the 3rd party) is the more evil candidate that you dislike the most. And the school that you have possibility of getting in, but is not your favorite school, is the lesser of the two evil candidate.