How the Federal Court System Works
Cases which go to the Federal Courts start at a District Court. A District Court has jurisdiction (judicial power) over a "District". A District is either a State, a division over a State, or a territory which is not a State (such as Washington D.C. and Puerto Rico). There are about 90 District Courts each located in the District they have jurisdiction over. The States with the largest number of District Courts are California, Texas and New York, which have four each.
If a Case is appealed from a District or Special Court, the case goes to a Court of Appeals. A Court of Appeals has jurisdiction over a "Circuit". 11 of these Circuits consist of several States, and appeals from District Courts within these States go to the Court of Appeals for the Circuit they belong to. Each Circuit has a number, from 1 to 11. There are two more Courts of Appeals which are both located in Washington D.C. The first covers the D.C. Circuit and hears appeals from the District Court of Washington D.C. (which frequently involves Federal Government business). The other is responsible for the "Federal Circuit", and hears appeals from Special Courts.
Finally, there's the Supreme Court in Washington D.C. The Supreme Court decides which cases it wants to hear. Out of the 10,000 appeals per year which go to the Courts of Appeals, the Supreme Court chooses to hear 100 which it considers necessary to be dealt with by the Highest Court of the Land. However, the Constitution lists a very limited number of occassions where cases are required to be heard immediately by the Supreme Court, such as if a State Government was to sue another.