PNETs are tumors that arise from the hormone-producing cells of the pancreas. These cells are part of the endocrine system and are responsible for producing hormones like insulin and glucagon. PNETs can be either functional or non-functional. Functional tumors secrete hormones and often present with specific symptoms related to hormone overproduction, while non-functional tumors do not secrete hormones and are typically detected at a later stage due to their size or metastatic spread.