Question

ΔHoreaction=∑ΔHof(products)−∑ΔHof(Reactants) --> What exactly is happening in this equation?

Answer 1

The difference between the sum of the enthalpies of the products and the sum of the enthalpies of the reactants.

You are missing important part, so I'm writing again the whole equation:

In the above reaction, n and m are the coefficients of the products and the reactants in the balanced equation.

Reaction in which a system RELEASES heat to its surroundings.
H is negative (H < 0)

or

Reaction in which a system ABSORBS heat from its surroundings.
H is positive (H > 0)