The Mandelbrot Set is calculated by repeating:
z = z^2 + c;
until the absolute value of z (distance from 0) is greater than say 4, where z and c are complex numbers, c is the coordinates of the point being calculated.

Let z be a + bi and c = e + fi, the calculation becomes:
z = (a+bi)^2 + (e+fi)
z = a^2 + 2abi - b^2 + e + fi
or
a = a^2 - b^2 + e
b = 2ab + f

The test condition,
a^2 + b^2 > 4
is changed here to the equivalent
a^2 > 4 - b^2
in this code.

Replacing all the sneaky code with more traditional structures, we get:

float o=0.075; /* distance between pixels     */
float h=1.5;   /* imag component of c         */
float T;       /* real component of c         */
float r;       /* O squared                   */
float O;       /* imag component of z         */
float l;       /* I squared                   */
float I;       /* real component of z         */
int _;         /* iteration count             */
int L=80       /* max iterations & line width */
int s=3200;    /* total "pixels": 80*40       */

main(){
    while (s>0) {  /*  lines 4 & 6 */
        r = O * O;
        l = I * I;

        _++;

        if (4-r<l || _==L) {
/* line 6 above ends here, next is line 7 */
            s--; _--;
            if (s%L==0) {
                write(1,"\n",1);
            } else {
                if (_<L) {
                    write(1,_%6+"123456",1);
                } else {
                    write(1," ",1);
                }
            }
        /* line 8: */
            O = I = l = _ = r = 0;
            T += o/2;
        }

    /* line 10: z=z^2+c */
        O = I * 2 * O + h;
        I = l + T - r;

/* this next bit is line 5 */
        if (s%L) {
            h -= o;
            T = -2;
        }
    }
}
The main loop has been sucked into the iteration loop, updating its variables when each pixel is finished.