Xen is an open source, bare metal hypervisor. It runs as the most privileged piece of software, and shares the resources of the hardware between virtual machines.
When Xen boots, dom0 is automatically started as well. Dom0 is a virtual machine which, by default, is granted full permissions . A typical setup might be:
Xen is deliberately minimal, and has no device drivers . Xen manages RAM, schedules virtual CPUs on the available physical CPUs, and marshals interrupts.
Xen also provides a hypercall interface to guests, including event channels (virtual interrupts), grant tables (shared memory), on which a lot of higher level functionality is built.