The quiver takes the shield slot and holds the ammunition — including one stack per quality, since different qualities do not stack together. Each one has its own distance: when the target is exactly that far in X or in Y, the shot adds the quiver's damage and does not miss.
The quiver always spends the best quality first: if you have super and plain arrows inside, the super ones leave first — no matter the order in which you stored them.

RankItemAttributesDropped by (top 4)
#1 quiver id 35562 guaranteed hit at 5 sqm · +1 damage / 2 slots / 12.0 oz Poodle (#1) 2.50% · Weakened Demon (#2) 2.48% · Donkey (#3) 2.46% · The Frog Prince (#4) 2.45%
#2 red quiver id 35849 guaranteed hit at 2 sqm · +7 damage / 3 slots / 12.8 oz Hide (#422) 0.23% · Monk (#423) 0.23% · Evil Sheep Lord (#424) 0.23% · Unbeatable Dragon (#426) 0.23%
#3 blue quiver id 35848 guaranteed hit at 6 sqm · +15 damage / 4 slots / 13.3 oz Paladin familiar (#759) 0.19% · Monk familiar (#758) 0.19% · Memory of a Pirate (#757) 0.19% · Memory of a Vampire (#756) 0.19%
#4 jungle quiver id 35524 guaranteed hit at 7 sqm · +23 damage / 5 slots / 13.5 oz Ferumbras Essence (#928) 0.28% · Pirat Mate (#927) 0.28% · The Axeorcist (#926) 0.28% · White Lion (#925) 0.28%
#5 candy-coated quiver id 45644 guaranteed hit at 6 sqm · +32 damage / 5 slots / 20.0 oz Silencer (#1096) 0.56% · Dragon Wrath (#1095) 0.56% · Dark Torturer (#1094) 0.56% · Wrath of the Emperor (#1093) 0.56%
#6 naga quiver id 39160 guaranteed hit at 5 sqm · +41 damage / 6 slots / 20.2 oz Overcharged Disruption (#1265) 1.55% · Guardian of Tales (#1264) 1.54% · The Welter (#1263) 1.53% · Last Planegazer (#1262) 1.52%
#7 alicorn quiver id 39150 guaranteed hit at 3 sqm · +50 damage / 7 slots / 20.0 oz World Devourer (#1487) 2.96% · Rotten Golem (#1350) 2.96% · Mould Phantom (#1351) 2.96% · Infernal Demon (#1352) 2.96%
#8 eldritch quiver id 36666 guaranteed hit at 4 sqm · +60 damage / 8 slots / 19.5 oz Massacre (#1353) 1.48% · Bakragore (#1548) 1.48% · Zarcorix Of Yalahar (#1547) 1.48% · Murcion (#1546) 1.48%