Dual core processor question?

I'm looking at the AMD Athlon™ X2 dual-core processor 4800 and i'm wondering exactly how processors work.

It says the processor is 2.5ghz, now does that mean that since its double there are two processors each 2.5 so it's like a 5ghz single

or

does it mean that there are like two 1.25ghz processors that combine to make 2.5ghz

If you can throw in anything else that would educate me on processors please enlighten me

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