The short answer is that they are x and y axis points plotted on a grid measured out from center line (CL), along a grid. The water line (WL or DWL) is almost always one of the horizontals on that grid. On complicated shapes there is also a diagonal line. Once lofted, you have full-sized patterns for the station moulds at given intervals of cross-sections of the hull. Beyond the simple explanation, here is an article:

http://www.duckworksmagazine.com/13/columns/austin/4/index.htm#.UqeqWH-9KSM

That's part one. The top of the page has a link for parts 2 through 7. Part 8 is where you write the designer and ask how much he charges for full-sized plans! :-)

Don't panic- it is not that hard. Just plot the points and connect the dots with a fairing batten. I just lofted a 6 meter sailboat and all her parts in a weekend, including cutting out templates for the forms.