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Khatam does not mean last, it means "seal." Khatam also means "ring." Therefore, in this verse it means that the Hadhrat Muhammad (saw) is the authority of prophets. He is the chief of all the prophets.
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Islam will prevail, a promise made by the Creator of this universe:
[61:8] They desire to extinguish the light of Allah with the breath of their mouths, but Allah will perfect His light, even if the disbelievers hate it.
[61:9] He it is Who has sent His Messenger with the guidance and the Religion of truth, that He may cause it to prevail over all religions, even if those who associate partners with God hate it.