PHP as a whole consists of 3 modules (Core PHP, Zend Engine and Extension Layer)
Core PHP is the module which handles the requests, file streams, error handling and other such operations
Zend Engine(ZE) is the one which converts human readable code into machine understandable tokens/op-codes. Then it executes this generate code into a Virtual Machine.
Extensions are a bunch of functions, classes, streams made available to the PHP scripts, which can be used to perform certain tasks.