So, basically, the Underground Man's life was not fun. Ever. Because interacting with another human was clearly not an option, he took refuge in "the sublime and beautiful." At these moments, he felt that he was a completely different person from the man who borrowed money to buy a beaver collar. At these moments, he was a hero.
At these moments, the Underground Man experienced intense feelings of happiness, faith, hope and love. He believed that some vocation – something for him to do in the real world – would suddenly make itself known, and he would be able to come out of his hole.
Of course, when he wasn't feeling like Superman, he was feeling like a loser stuck in a hovel of mud. That was his problem, he says: that he was always either a hero or a man degraded.
The hero moments only came in spurts, and they weren't strong enough to stop his "dissipation" (dissipation = general poor behavior. The Underground Man is admitting that he engaged in degrading activities, even when he was having one of his "sublime and beautiful" moments).
He compares these moments to a sauce: they merely spiced up the main dish that was his degradation – they certainly didn't get rid of it.
The thing about these dreamlike moments of happiness, he says, is that they were so removed from reality that he couldn't really apply them to the real world. So while he felt love, joy, and hope in these sublime dreams, they didn't enable him to go out and find love or be happy at work, etc.
Essentially, he divided his life into two realms: the real world, and the sphere of art in which his "beautiful and sublime" dreams lived.
In the sphere of art, he was a master and hero who always had control of the remote. He could fall in love, and even his shameful deeds had something lofty about them.
As you'll see in your text, there are some "Shout-Outs" here (to other literature) that might be confusing. "Manfred" is a reference to Lord Byron's poem Manfred, about a romantic, defiant hero. When the Underground Man talks about Austerlitz, he's referring to Napoleon's great victory there in 1805. Pope Pius VII was always at odds with Napoleon, so if the Pope left Rome and went to Brazil, as the Underground Man fantasizes about here, it would signal further victory on Napoleon's part.)
He then pauses; he suspects that we, his readers, find it vulgar that he's talking about all this.
He agrees that it is indeed vulgar, but it's even more vulgar that he's talking with us about the fact that it's vulgar and trying to justify its vulgarity. But enough, he says – and we agree.
He reiterates that these happy dreams always came in phases; three months was pretty much the max, and then he would feel the need to "plunge back into society."
That plunging generally meant a visit to Anton, the "immediate superior" and source of cash that we heard about in the previous chapter. Since Anton is only at home on Tuesday, his day-off, the Underground Man always had to schedule his dreaming to end on Monday nights.
He then tells us some more about this Anton character: the guy lived with his two daughters (aged thirteen and fourteen) and an aunt.
Anton often entertained guests, a variety of boring gentlemen who sat around talking about boring things. Every time the Underground Man visited, he was reminded of how much he didn't like people. Then he could go home again and "defer" his desire to embrace humanity.
And yet, somehow, amazingly, he had one friend. Well, better call him an "acquaintance." The guy's name is Simonov, and the Underground Man knows him from school. According to our narrator, Simonov is quiet and not completely stupid.
The Underground Man claims that he's had "soulful moments" with him, but that Simonov always seemed embarrassed about these moments after they had passed. The Underground Man was fairly sure that Simonov found him to be repulsive, but he still went to visit him anyway.
Now that we know who these guys are, the Underground Man launches into yet another story.
Here we go. It's Thursday and the Underground Man is struck by one of his sudden urges to be around people. Since it's not Tuesday, Anton is out of the question, so he decides to go see Simonov. At this point, it's been about a year since he's seen the guy.