Python for loop and iterator behavior

Your suspicion is correct: the iterator has been consumed.

In actuality, your iterator is a generator, which is an object which has the ability to be iterated through only once.

type((i for i in range(5))) # says it's type generator 

def another_generator():
    yield 1 # the yield expression makes it a generator, not a function

type(another_generator()) # also a generator

The reason they are efficient has nothing to do with telling you what is next "by reference." They are efficient because they only generate the next item upon request; all of the items are not generated at once. In fact, you can have an infinite generator:

def my_gen():
    while True:
        yield 1 # again: yield means it is a generator, not a function

for _ in my_gen(): print(_) # hit ctl+c to stop this infinite loop!

Some other corrections to help improve your understanding:

The generator is not a pointer, and does not behave like a pointer as you might be familiar with in other languages.
One of the differences from other languages: as said above, each result of the generator is generated on the fly. The next result is not produced until it is requested.
The keyword combination for in accepts an iterable object as its second argument.
The iterable object can be a generator, as in your example case, but it can also be any other iterable object, such as a list, or dict, or a str object (string), or a user-defined type that provides the required functionality.
The iter function is applied to the object to get an iterator (by the way: don't use iter as a variable name in Python, as you have done - it is one of the keywords). Actually, to be more precise, the object's __iter__ method is called (which is, for the most part, all the iter function does anyway; __iter__ is one of Python's so-called "magic methods").
If the call to __iter__ is successful, the function next() is applied to the iterable object over and over again, in a loop, and the first variable supplied to for in is assigned to the result of the next() function. (Remember: the iterable object could be a generator, or a container object's iterator, or any other iterable object.) Actually, to be more precise: it calls the iterator object's __next__ method, which is another "magic method".
The for loop ends when next() raises the StopIteration exception (which usually happens when the iterable does not have another object to yield when next() is called).

You can "manually" implement a for loop in python this way (probably not perfect, but close enough):

try:
    temp = iterable.__iter__()
except AttributeError():
    raise TypeError("'{}' object is not iterable".format(type(iterable).__name__))
else:
    while True:
        try:
            _ = temp.__next__()
        except StopIteration:
            break
        except AttributeError:
            raise TypeError("iter() returned non-iterator of type '{}'".format(type(temp).__name__))
        # this is the "body" of the for loop
        continue

There is pretty much no difference between the above and your example code.

Actually, the more interesting part of a for loop is not the for, but the in. Using in by itself produces a different effect than for in, but it is very useful to understand what in does with its arguments, since for in implements very similar behavior.

When used by itself, the in keyword first calls the object's __contains__ method, which is yet another "magic method" (note that this step is skipped when using for in). Using in by itself on a container, you can do things like this:
```
1 in [1, 2, 3] # True
'He' in 'Hello' # True
3 in range(10) # True
'eH' in 'Hello'[::-1] # True
```
If the iterable object is NOT a container (i.e. it doesn't have a __contains__ method), in next tries to call the object's __iter__ method. As was said previously: the __iter__ method returns what is known in Python as an iterator. Basically, an iterator is an object that you can use the built-in generic function next() on¹. A generator is just one type of iterator.
If the call to __iter__ is successful, the in keyword applies the function next() to the iterable object over and over again. (Remember: the iterable object could be a generator, or a container object's iterator, or any other iterable object.) Actually, to be more precise: it calls the iterator object's __next__ method).
If the object doesn't have a __iter__ method to return an iterator, in then falls back on the old-style iteration protocol using the object's __getitem__ method².
If all of the above attempts fail, you'll get a TypeError exception.

If you wish to create your own object type to iterate over (i.e, you can use for in, or just in, on it), it's useful to know about the yield keyword, which is used in generators (as mentioned above).

class MyIterable():
    def __iter__(self):
        yield 1

m = MyIterable()
for _ in m: print(_) # 1
1 in m # True

The presence of yield turns a function or method into a generator instead of a regular function/method. You don't need the __next__ method if you use a generator (it brings __next__ along with it automatically).

If you wish to create your own container object type (i.e, you can use in on it by itself, but NOT for in), you just need the __contains__ method.

class MyUselessContainer():
    def __contains__(self, obj):
        return True

m = MyUselessContainer()
1 in m # True
'Foo' in m # True
TypeError in m # True
None in m # True

¹ Note that, to be an iterator, an object must implement the iterator protocol. This only means that both the __next__ and __iter__ methods must be correctly implemented (generators come with this functionality "for free", so you don't need to worry about it when using them). Also note that the ___next__ method is actually next (no underscores) in Python 2.

² See this answer for the different ways to create iterable classes.

For loop basically calls the next method of an object that is applied to (__next__ in Python 3).

You can simulate this simply by doing:

iter = (i for i in range(5))

print(next(iter))
print(next(iter))  
print(next(iter))  
print(next(iter))  
print(next(iter)) 

# this prints 1 2 3 4

At this point there is no next element in the input object. So doing this:

print(next(iter))

Will result in StopIteration exception thrown. At this point for will stop. And iterator can be any object which will respond to the next() function and throws the exception when there are no more elements. It does not have to be any pointer or reference (there are no such things in python anyway in C/C++ sense), linked list, etc.

Python for loop and iterator behavior

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