Can somebody explain how this circuit works?
This circuit is used to provide an isolated power supply, its used for protecting a load from undesired rush current. 

PWM is used for switching purposes, fast switching rate result in increase and decrease of electrical current through the primary winding of the transformer making a magnetic field. this magnetic field is transferred back to electrical current through the secondary winding of the transformer. 

RB2 A base resistor provides the necessary resistance to bias the base junction of a bipolar junction transistor (BJT)

Q2 a NPN bipolar junction transistor (BJT), is a semiconductor device which can be used for switching or amplification. You can read a book about BJTs and their applications!

D8 is called a Schottky diode and its used due to its fast switching response and low forward voltage drop. A normal diode will have a voltage drop between 0.6 to 1.7 volts, while a Schottky diode voltage drop is usually between 0.15 and 0.45 volts.

Rosc2 current limiting resistor and osc refers to the oscillation of PWM

78253/55 its a type of transformer that transfers electrical power from a power source to some equipment or device, and is used for isolation. This type of isolation is called galvanic isolation.

DR2 Is a diode and used to allow current to pass current in a one way direction.

C is a capacitor and is used to smooth the output voltage and eliminate voltage ripples.

Dz2 is Zener Diode and is used as a voltage regulator.

Rp3 A resistor is connected in parallel to a load in a circuit for both safety and to have maximum power delivered to the load.