What happens in Canto XI of Dante's Inferno?

Canto XI
Dante and Virgil have traveled past the burning tombs of Frederick II and the Ghibelline Cardinal. The stench emanating from the forever flaming bodies is horrendous. Dante and Virgil duck under the cover of one of the stones, trying to take cleaner breaths. Dante sees that the inscription on the tomb reads:

“Pope Anastasius I hold,
Whom out of the right way Photinus drew."

These two men are, in Dante’s estimation, the worst of the arch-Heretics. Phonitus was a Deacon in the Church of Constantinople (the Greek Orthodox Church). Phonitus believed, and led Pope Anastasius to believe, that Christ’s birth was not miraculous at all; rather, he argued, Jesus was the product of natural human sexual relations. Additionally, Phonitus tricked the pope into giving him communion, an act strictly forbidden for those outside the Roman Catholic faith.
Virgil tarries, and Dante urges his guide to move on; but Virgil wants to prepare his charge for the horrors that are to come. The next circle will house the Violent. Inside the large seventh circle are three sub-circles. The largest outer ring is reserved for conducted violence against people or property. These murderers and bandits are submerged in a river of blood:

A death by violence, and painful wounds,
Are to our neighbour given; and in his substance
Ruin, and arson, and injurious levies;
Whence homicides, and he who smites unjustly,
Marauders, and freebooters, the first round
Tormenteth all in companies diverse."

The next inner circle imprisons those who have committed violence against themselves: the suicides and the squanderers:

"Man may lay violent hands upon himself
And his own goods; and therefore in the second
Round must perforce without avail repent
Whoever of your world deprives himself,
Who games, and dissipates his property,
And weepeth there, where he should jocund be."

The final circle is exclusively for the tormenting of those who had committed crimes against God or nature. These sinners were, in life, the blasphemers, the sodomites, and the usurers. These shades exist on a plain of sand, which eternally erupts underneath them in excruciating flames:

"Violence can be done the Deity,
In heart denying and blaspheming Him,
And by disdaining Nature and her bounty.
And for this reason doth the smallest round
Seal with its signet Sodom and Cahors,
And who, disdaining God, speaks from the heart.
Fraud, wherewithal is every conscience stung,
A man may practise upon him who trusts,
And him who doth no confidence imburse.
This latter mode, it would appear, dissevers
Only the bond of love which Nature makes;
Wherefore within the second circle nestle
Hypocrisy, flattery, and who deals in magic,
Falsification, theft, and simony,
Panders, and barrators, and the like filth.
By the other mode, forgotten is that love
Which Nature makes, and what is after added,
From which there is a special faith engendered.
Hence in the smallest circle, where the point is
Of the Universe, upon which Dis is seated,
Whoe'er betrays for ever is consumed."

In these verses, Dante is alluding to the biblical story of Sodom and Gomorrah, a city so morally evil that it was destroyed by God (Genesis 19:24-5). Cahors was a city in France, infamous for its usury. Usury is the charging of interest on money lent. It is a sin because Adam’s punishment was to “live by the sweat of his brow” (Genesis 3:19). Since there is no labor involved in collecting interest, medieval Catholics consider the practice sinful.
Virgil then tells Dante that when they get to the Eighth Circle, he will see those who are guilty of fraud, a sin almost every human commits. These sinners include those who had been practicers of

“Hypocrisy, flattery, and who deals in magic,
Falsification, theft, and simony,
Panders, and barrators, and the like filth.
By the other mode, forgotten is that love
Which Nature makes, and what is after added,
From which there is a special faith engendered.
Hence in the smallest circle, where the point is
Of the Universe, upon which Dis is seated,
Whoe'er betrays for ever is consumed."

(Note: “Simony” is the practice of selling spiritual items. “Barrators” are those who continually file frivolous lawsuits.)
Dante understand the crimes of the condemned, but he asks Virgil why these souls are punished so much more harshly than those of the upper Hell. The elder poet reminds Dante of Aristotle work, Ethics and how sin is divided: "incontinence, malice, and insane bestiality.” (Note: “incontinence” means a lack of self control, particularly sexual, but also gluttony, wrath, and sullenness; “malice” means the fraud previously described; “insane beastiality” refers to all the acts of violence also discussed previously.)
Of these three, incontinence is the least serious although, of course, it still merits punishment. All of these sinners pay their eternal debt in upper hell. The remainder, the most serious, offenses, are housed below.
Dante understands everything except for the harsh judgment against usury. Virgil explains that the man who thwarts honest work not only cheats his customer, but shows his disdain in real work:

“the usurer takes another way,
Nature herself and in her follower
Disdains he, for elsewhere he puts his hope.”

Time is passing. Virgil notices the changing constellations and tells Dante they must leave the tortured souls of Circle Six behind them.