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It diffuses in the alveoli.
Inside the alveoli, oxygen moves across thin walls to tiny blood cells called capillaries and into your blood. It is then picked up by a chemical called haemoglobin in the red blood cells that carry it around your body.

Hope this helps.

Everything in the body is connected. So when you inhale through your nose the oxygen travels down your windpipe helping send air and puffs of energy into your heart which pushes the oxygen into your veins only to be exhaled in a matter of seconds. I for one think the body is an extrodinary thing.