Freud proposes that new-born children posses sexual impulses, which progress for a short while before being suppressed and between which there is a period of 'latency'.
Sexual Inhibitions
In the period of latency, forces of shame, disgust, and aesthetic and moral ideas are built up. This is the result of education but also organically determined through hereditary paths.
Reaction-formation and Sublimation
Freud proposes that sublimation is the process by which we divert sexual instinctual forces from sexual aims on to new aims, partly because during childhood these impulses cannot be used, but also partly because they evoke the reactions of shame, disgust, and morality - hence the role of "reaction-formation".
Interruptions of the Latency Period
Whilst knowledge of the period of latency is scarce, Freud claims that from time to time it can be seen that manifestations of sexuality manage to break through sublimation. But overall it seems that in this period both educators and internal forces construct moral defensive forces at the cost of sexuality, making sexuality out to be a 'vice'.