Trying to do a simple answer - it's too easy to turn your question into a whole biology lesson! :0P So I've copied this from a site and pasted the link at the bottom if you want to read more.
Basically, three processes occur during what we loosely refer to as "digestion". DIGESTION PROPER, which is the mechanical and chemical breakdown of food into particles/molecules small enough to pass into the bloodstream and circulatory system. ABSORPTION is the passage of food monomers into the blood stream. ASSIMILATION is the passage of the food molecules into body cells.
http://www.emc.maricopa.edu/faculty/farabee/bi obk/BioBookDIGEST.html
I hope this is helpful!