I think they determine this by the time in which the apps are complete and sent. However, I asked someone that worked in the admission office in a dental school and they told me they do everything by computer, and that they don't get any mail or batches from AADSAS, as soon as something is complete they see it in the computer when they download the data.
I have not applied yet, but I'm pretty sure that AADSAS tells you when your application gets mailed out (I think I read on some thread a long time ago that your status changes from not mailed to pending to mailed), and using that information (+ the schedule for when/how often applications are mailed out) people on SDN figure out what batch they are in.
I highly doubt the whole "1st/2nd/3rd/4th/etc batch" thing is anything official.