Without the VPN, your ISP knows you are making a DNS request, but they can't see what domain you are resolving. A moment later, they see the IP that request resolved to, when you request that site. They can see how much encrypted traffic is going back and forth. When they see that the IP address hosts a porn site, and traffic analysis shows you're starting and stopping video streams, they know you're jerking off, but can't figure out your specific fetish.
With a VPN, your ISP only ever sees the VPN's IP address. They know when you are sending and receiving traffic to/from that IP, but they don't know the original source. With traffic analysis, they can probably figure out that you're watching videos, but they probably can't distinguish between YouTube and YouPorn.