Yes (you are confused).
Elements that are formed by normal fusion at the core of stars go up to iron. Nothing beyond that (except an extremely tiny amount). A small portion of this is returned to space through convection and stellar wind.
Of course, a bunch of it is also returned when a larger star explodes. During the explosion itself, there is so much excess energy available that many elements (including those beyond iron) are created and sent out in space.
All these mix with existing gas clouds (which are still mostly hydrogen and helium).
When a "polluted" cloud collapses to form a new stellar system, most of the stuff falls to the centre to form the star, including the heavier elements. Remember most of it is still mostly H and He.
In our Sun, the core pressure and temperature is sufficient for H fusion (forming He) but not much beyond that. The heavier atoms sink to the centre (through density) but they mostly sit there, mostly getting in the way. Some of them (especially Carbon) do participate in the fusion of H into He, acting as catalyst. This process is called the Bethe-Weizsäcker-cycle.
(most of us simply call it the CNO cycle, as the Carbon atom is turned into a Nitrogen when it fuses with a H, then an Oxygen, then back at Carbon as it releases the He).
Inside our Sun, the CNO cycle only contributes to 1.7% of the energy, the rest being the "normal" p-p processes (proton-proton)