Amended 2020 return shows a refund of $2511. The original return was an amount due of $3674. What happens when IRS processes the amended return?

Did you pay the original balance due ???   If you did not or you only paid a portion the amount actually paid should be reported on line 16. 

Look at the form 1040X …

Column A should have the figures from the original return, Column C the corrected figures and Column B the differences between the other 2 which needs an explanation on page 2 of the form 1040X.

If you completed it correctly you will see an entry on either line 16 OR 18:

On line 16 should be the amount you paid with your original return. If you paid nothing already then this line should be zero.

On line 18 should be the amount of your original refund you received.  If you have not received your refund yet then you need to wait for it.  If the refund changes from what you expected then this line must reflect that change.

Then you will see your extra refund on line 22 OR  the new balance due you need to pay on line 20.

If the IRS approves the tax refund on the amended return, the refund will be applied to the taxes owed.