I found this circuit on the internet and tried it. It works but my electronics theory is on the weak side and I don't really understand what is going on. Can anyone help me understand it? I know the basic components but I don't get what this design is doing. Thanks in advance for any help.

RS232 comm is on a different voltage level. +-12 to 15 Volts. This circuit simply limits the incoming signal to within .7 V to prevent smoking whatever is on the TTL or 5 Volt circuit side. Most newer RS232 inputs will accept a TTL level but not the other way around.