Fortunato, drunk, makes one of the secret signs of the freemasons to Montresor. Montresor, not being part of the secret society, does not understand the sign. Fortunato says to him, don't you comprehend the sign? Montresor says no. Fortunato then responds, oh, then you are not of the masonic brotherhood. You are not a mason.
Montresor, punning on a different meaning of the word mason, says he is a mason. He means the kind of mason who builds a wall with bricks and mortar, not a member of the secret society.
Fortunato has the following reaction after asking for a sign that will prove Montresor is part of his secret society:
"A sign," he said, "a sign."
"It is this," I answered, producing from beneath the folds of my roquelaire a trowel.
"You jest," he exclaimed, recoiling a few paces. "But let us proceed to the Amontillado."
Fortunato thinks Montresor...
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is joking: he recognizes that the trowel is not a secret sign of the brotherhood. However, he does not understand what Montresor is trying to communicate to him and so falls into his trap. It is also possible that Fortunato is showing off his superiority in being a mason: this may be one of the "thousand insults" that Montresor feels he must avenge.
Montresor pulls the trowel from his cloak after Fortunato expresses his shock at Montresor's insistence that he is a member of a masonic society. Of course, Montresor really means that he is a mason in the sense of it being a name for someone involved in stone work; Montresor shows the trowel as a symbol of his intendion to use his masonry skills in order to entomb Fortunato in the recesses of the catacomb. Montresor did not realize that Fortunato was actually not referring to the masonic society at all. Had Fortunato been more sober, he would probably have wondered why Montresor carried a trowel; of course, Fortunato's drunkenness prevented him from recognizing Montresor's hints on more than one occasion.