If you dont bother thinking about it, yea its simple. I'm assuming you havent read the book though. If you did, it might baffle you to see how many details and twists there were, and the big explanation at the end has you go "whoa it was there the whole time and I never saw it."
Aww heck, heres a huge spoiler, both for people who havent seen the movie, and those who have but havent read the book... its a lot of typing, so dont bother reading if you just don't care.
When Hagrid, McGonagall, Fudge, and Rosemerta were talking in the bar, they explained how Black betrayed the Potters. The Potters knew that Voldemort was after them, so they decided to use the "secret keeper" spell. Apparently this spell would have made it so that Voldemort could look right into the Potter's window and never even see that they lived there. This "secret" has to be kept inside someones soul, someone very trustworthy, because the only way for the information to be divulged is for the secret keeper to willingly tell someone. The secret keeper, of course, was Sirius Black. Of course, since he was a spy working for Voldemort, he divulged the location of the Potters, and Voldemort killed Harry's parents, and met his own demise as well...
Right after it happened, Hagrid showed up, and saw that Sirius was on the scene, very pale and nervous. So Hagrid took Harry, to deliver him to Dumbledore, and Sirius lent Hagrid his flying motorbike (seen in the first movie) because he "wouldnt be needing it anymore. Hagrid at the time didn't know that Sirius had just betrayed the Potters.
So later that night, Peter Pettigrew, the 4th friend (of James, Lupin, Sirius, and Peter...) encountered Sirius, and managed to corner him. Peter was normally very frightful, but the outrage that Sirius had just betrayed his best friend made him a bit bolder. So Sirius, now cornered, unleashed a spell that was powerful enough to blow a crater in the street, killing 12 muggles and Peter himself, leaving only but a finger behind. After the incident, Sirius only stood there, laughing, as he was arrested and taken to Azkaban.
That was the story everyone believed before the truth was revealed in the end.
In the scene in the Shrieking Shack, when Lupin bursts in, and hugs Sirius, Hermione is outraged that she trusted Lupin, knowing he was a werewolf. So Lupin and Sirius explain the true story. When Lupin first came to Hogwarts as a student, they had no magical potion that allowed Werewolves to stay in there right mind when they transformed (which is was they are talking about in the movie when they ask "haven't you taken your potion tonight?"), so Dumbledore, being very sympathetic to Lupin, has the Whomping Willow planted over a tunnel that leads into the Shrieking shack, where Lupin would go every month to transform, out of danger to people. Sirius, James, and Peter eventually found out about this, being Lupin's friend and all, and decided that they should learn to become animagi. Werewolves are only a danger to people, so becoming animals would allow them to hang out with their friend, and go basically wherever they wanted around the castle (also with the help of James' cloak). With all this freedom, they found out a lot about the castle, all its secrets and everything, so the 4 friend created the "Marauders Map". Lupin was Moony, Sirius was Padfoot, Peter was Wormtail, and James was Prongs (who transformed into a stag, and hence why Harry's patronus takes that shape). Since they were illegal animagi, (legal ones are supposed to be registered with the ministry and whatnot), Lupin was too ashamed to tell Dumbledore that Sirius was sneaking into the castle as a dog, after all that Dumbledore had done for him.
Anyway, Sirius often had Cornelius Fudge visit him, and asked if he could have some old copies of the Daily Prophet to entertain him. Fudge did this, and on the cover of one edition was the Weasley family, who had just won a Galleon giveaway and spent it on a trip to Egypt. It showed the whole family in a picture, including Ron's rat, on his shoulder, with a missing toe. It was Pettigrew. What no one knew was that at the last minute, when they performed the Secret Keeper spell, Sirius had switched and allowed Peter to be the Secret Keeper, because Voldemort would have expected it to be Black, and certainly would have come after him. But no, no one would ever expect poor pathetic little Peter Pettigrew. Unfortunately, Peter was a spy working for Voldemort the whole time, always being one to keep friends who were "big bullys" to protect him (such as Sirius and James). Seeing Peter in the Daily Prophet gave Sirius an obsession... it wasnt a happy thought that the dementors could suck out of him. He knew now that Peter was staying with a wizard family, that would know when Voldemort was regaining power, and he would also know when the time was right to do a sneak attack on Harry Potter, proving his loyalty to Voldemort (because he wouldn't kill Harry unless there was something in it for him too..). Dementors also cant detect the strange "emotions" put forth by animals as well, so turning into a dog helped him escape.
So on the night that Harry's parents died, what really happend was Black found Peter, and Peter started making a scene "Lily and James, Sirius! how could you betray them?!" and cast his own spell, that blew a crater in the middle of the street, killing 12 muggles, and leaving one of his fingers behind, for evidence that Sirius had killed him.
That's basically all the details that the movie left out of Black's story.
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"Guns don't kill people, I kill people."
"Guns don't kill people, I kill people."