PPTP operates at the data link layer (layer 2) of the OSI model and uses native PPP authentication and encryption services. Designed for individual client to server connections, it enables only a single point-to-point connection per session.
PPTP -Point-to-Point Tunneling Protocol -extends the Point to Point Protocol (PPP) standard for traditional dial-up networking. PPTP is best suited for the remote access applications of VPNs, but it also supports LAN internetworking. PPTP operates at Layer 2 of the OSI model.
Using PPTP PPTP packages data within PPP packets, then encapsulates the PPP packets within IP packets (datagrams) for transmission through an Internet-based VPN tunnel. PPTP supports data encryption and compression of these packets. PPTP also uses a form of General Routing Encapsulation (GRE) to get data to and from its final destination.
Reference(s) used for this question: KRUTZ, Ronald L. & VINES, Russel D., The CISSP Prep Guide: Mastering the Ten Domains of Computer Security, John Wiley & Sons, 2001, Chapter 3: Telecommunications and Network Security (page 95). and http://compnetworking.about.com/od/vpn/l/aa030103a.htm and http://technet.microsoft.com/en-us/library/cc768084.aspx