The plot of "The Cask of Amontillado" unfolds as a flashback. Fifty years have passed since the main events of the story took place. Although we are not certain, it seems that Montresor, the narrator, might be on his deathbed, confessing to his priest, because he addresses his listener as
You, who so well know the nature of my soul...
Montresor begins his narrative by justifying the revenge he is about to take, situating this as a story where we expect something terrible to happen. Then, still using a first-person perspective, he takes us sequentially, step by step, through what happened. It starts at the carnival celebration, where Montresor runs into Fortunato. Montresor sets his trap, saying he has a rare cask of amontillado, a type of sherry, to show Fortunato. Fortunato takes the bait and is anxious to sample this rare wine.
Not sensing any danger, Fortunato willingly follows Montresor into the dark, damp catacombs. Poe has set the story up to use dramatic irony, which is when the reader knows something a character in the story does not. We as readers are anxious, because we know from the first paragraph that Montresor has plotted revenge; but Fortunato is unaware of the perils of the situation unfolding. We don't know what form the revenge will take, however, so we are in suspense.
Poe uses a good deal of sensory imagery to convey how cold, damp, and creepy the catacombs are. It is completely dark in this isolated, below-ground space, where only the torch sheds any light. To make it even creepier, the two go past piles of human bones as they make their way to the vault where Montresor will chain and wall up Fortunato.
By using dramatic irony, increasingly creepy imagery, and gradually bringing Fortunato closer and closer to his doom without letting us know what it is, Poe maximizes the suspense and horror.