What does sodium do in water?

The unstable nature of sodium and other alkali metals makes it fun to throw in water. Sodium rips apart the oxygen and hydrogen atoms that form water, thus converting water into hydrogen and oxygen.

Then, the immense heat generated by the reaction will ignite the hydrogen, fusing it with oxygen to form water (water atoms is made out of one oxygen atom and two hydrogen atoms), and also at that time the fire made by the hydrogen that was set aflame will create that big explosion and fire.