When I buy a Bitcoin with dollars, where does the money go to?

Question

I understand the networking concept of the coin, but I am not sure I understand the purchase process.

Let's say I have 1000$ that I want to spend on Bitcoins, who do I give this money to?

Answer 1

You give the money to someone who has bitcoins available to sell to you.

This might happen via an exchange such as bitstamp.net which matches buyers and sellers.