Imagine that, contrary to what you learned about quantum mechanical spin in Chapter 5, an electron really does have a definite spin vector with all three components precisely determined. None of this probability stuff. So this vector is the hidden variable.
We can reconcile this idea with the Stern-Gerlach experiment by claiming that we don't completely understand spin measurement. When we measure we somehow end up getting the value any time that has a positive -component. And we end up measuring the value any time has a negative -component.