The people stuck inside The Matrix are trapped by the machines. Their actual bodies are inside pods. They're in a huge pod field, being harvested as a power source to feed the machines. The humans created the machines, but the machines got too powerful and took over. The only free humans travel into this World to free Neo. Neo enters into The Matrix in order to destroy the Agents, Programs protecting the minds of those trapped inside. Once he defeats them, he will free the humans. However, he must venture to the place where it began, The Source. There's a theory that Neo is not entirely human, I support the theory. So much indicates that Neo must also be part machine. Morpheus believes what The Oracle told him, that he'll find The One. But Neo reveals that the prophecy was a lie. Morpheus' belief in Neo remains. Neo sacrifices himself, accepting defeat at the hands of Smith. Once the inevitable happens, there is no purpose for either. Smith is deleted. What happens to Neo is a mystery.