I just recently began to study quantum chemistry and need some clarification for the construction of Kohn-Sham orbitals.
Consider a system of several atoms. Let there be $N$ electrons in this system.
We can reduce the description of such a system to the $\psi_i$ single-electron wave functions describing the orbital, where the index $i$ takes a value from $1$ to $N$.
Now consider the same system in the framework of the density functional theory.
The description converts to molecular wave-functions $\varphi_j$. Molecular orbitals are obtained from the Kohn-Sham equation:
\begin{align}
\left(
- \frac{\hbar^2}{2m} \nabla_j^2
+ \nu_\mathrm{eff}(\mathbf{r})
\right) \varphi_j(\mathbf{r})
&= \varepsilon_j\varphi_j(\mathbf{r}), &
j &= 1,\dots, K.
\end{align}
How is it determined how many molecular orbitals are now? $K=N$? How do the new molecular orbitals make up the overall wave function of the system?
I am a little confused by the fact that atomic orbitals form molecular ones according to very complex principles and it is unclear how this is taken into account.