How a packet is encapsulated

An outgoing IP packet is encapsulated in a PPP packet. This PPP packet is encapsulated in a L2TP packet. Again, this encapsulation does not make any sense, but it is declared 'Standard' from Microsoft. The resulting L2TP packet is finally encrypted (Enc { }) by the IPsec stack, the IPsec headers and trailers are added, and the resulting ESP packet leaves the network interface.

The receiver of the packet strips the packet using the decapsulation the other way round.