in jQuery, what is the difference between $("div") and $("")?

I have a code in a book which reads:

function hit()
{
    var $d = $("<div>");
    $d.addClass("current_hand")
      .appendTo("#my_hand");
}

I know that $("div") will select all the div elements. However what does $("<div>") do? Does it create a new div element? If so, is this the standard way of creating new DOM elements in jQuery, or are there other ways?