The best way to explain is by example: [Note: Stats used are not actual, nor are the trans. gains. Check the races page for real transformation gains.]
Artik shoots Makoto with a strong ki beam. (Ki is the same as Powerlevel)
Ki used: 10,000
Left: 90,000
Makoto's turn:
Makoto attacks Artik with a volley of punches and kicks.
Stamina used: 50,000
Left: 50,000
Artik turns Super Saiyan and dodges his attacks. He then launches an all-out ki blast.
Ki gained from transformation: 100,000
Ki:190,000
Speed used (In dodge): 50,000
Left:50,000
Ki used: 190,000
left: 0
~When your ki or stamina reaches 1 or 0, you get k.o.ed (If its 0, you die...)~
Stamina can also be used to block.
FIGHT OVER!
~Now, you would wait for a mod+ to grade your fight. Don't worry, even if you lost, you'd still get stat gains.