What does APT-get update do?

apt-get update downloads the package lists from the repositories and “updates” them to get information on the newest versions of packages and their dependencies. It will do this for all repositories and PPAs. From Used to re-synchronize the package index files from their sources.

What is apt-get update and upgrade?

apt-get update updates the list of available packages and their versions, but it does not install or upgrade any packages. apt-get upgrade actually installs newer versions of the packages you have. After updating the lists, the package manager knows about available updates for the software you have installed.