Understanding of physical reality is rooted in the knowledge obtained from observations. The knowledge is encoded in variety of forms, from sequence of letters in a book, to neural circuits in a brain. At the core, any encoded knowledge is a sample of correlated events (symbols). I show the event samples bear attributes of a physical reality: energy, temperature, momentum, mass. I show that treating measurement as event sampling is consistent with predictions of quantum mechanics (QM). I discuss QM basics: wave function, Born rule, and Schrödinger equation, emphasizing their true meaning, which is rarely, if ever, mentioned in textbooks. I derive similar expressions using event sample as base construct, demonstrating the connection between QM and the presented model. I explain the mechanics of observation, and the role of observer. I show how model extends to include dispersion, decoherence, transition from quantum to classical state. I prove decoherence is a key factor in Fermi's golden rule, in Planck's radiation law, and in emergence of time. The controversial aspects of QM, such as wave function collapse, and measurement problem, do not appear in presented framework, which I call the knowledge mechanics (KM)