Quoted from fnosm:So how does the diode absorb the spike?
The diode doesn't absorb the spike per se. It causes the current to loop through the diode and coil over and over and over until the voltage is dissipated by the (small) resistance in the coil.
Here's a pretty good article about how this is used in other applications to protect the driving circuit.
http://en.wikipedia.org/wiki/Flyback_diode
Post edited by txx3ddq442: forgot the link