I know that Ice and salt undergo an endothermic reaction but I don't understand how. What is absorbing the heat? How is an endothermic reation occurring if and actual reaction is not? Salt and ice form a mixture.

Well, to start with there really isn't a chemical reaction similar to combustion going.

The ice is simply melting. This absorbs around 100 BTU's per pound of ice melted. What salt does is lower the melting point by partially neutralizing the ionic forces that allow water to freeze at such a high temperature. This lowers the melting point. If there were no ionic forces involved, water would freeze at a lower temperature than Dry Ice or CO2.

This lowering of melting temperature is reflected in the Fahrenheit scale. 0 degrees Fahrenheit is defined as the melting point of Ice in a saturated solution of NaCl or table salt. This is why you add salt to the ice in an Ice Cream Freezer.