In order for the prerequisite to really work correctly, you would need to edit the module set to be a prerequisite and add Requirements. It's those requirements that determine if students have completed it. Requirements can be just to view something, mark it as complete, submit, or even achieve a specific score. And they can be set on each item within a module or just a few of them. Here is more information
So in summary, if you have Module 1 and Module 2, you set Requirements within Module 1 to indicate what needs to be completed, and then in Module 2 you set Module 1 as a prerequisite.