Closest to the edge is the moist, light, living layer that we know it as sapwood. It is packed with xylem tubes that carries water and nutrients up from its roots to its leaves in the tree.
Then, there is a much darker, harder, part of the tree called the heartwood, which is dead. It consists of the xylem tubes that were blocked up with resins or gums and stopped working.
Around the outer edge of the sapwood, is a thin active layer called the cambium where the tree is growing outwards each year, forming the famous annual rings that tell us how old a tree is.
 
Hence, slicing through a tree horizontally, you will see the annual rings making up the cross-section. Cutting it vertically through a tree trunk, you will see lines inside running parallel to the trunk formed by the xylem tubes, which is also the inner structure of the wood known as its grain. The occasional wonky ovals interrupting the grain are called knots, which are the places where the branches grew out from the trunk of a tree.
 
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