DracoFighter emphasizes general fighting game strategy with its simplified gameplay, especially the neutral. The first thing you should ask is "what is my win condition?" While dependent on character, every character has an ideal range and advantageous situation.
In a nutshell, spacing is placing yourself at the proper distance against the opponent. You should always be making sure to space depending on both your range and the opponent's range. For example, if you're BiOS, you generally want to be close to the opponent. If you're against a Plexie, she wants to keep you at mid range. Because of this, you will have to space outside her ranged moves to avoid getting hit, and when you find an opening, you can dash or jump in to keep her at close range. However, she will always try to keep you at the mid range because that's where she's safest, and where all her attacks will beat out yours.
From the beginning of every match, both players will be trying to fight for their ideal range, and that forms the Neutral, when both neither player has a clear advantage.
The advantage stage is when a player gets a clear advantage. Your goal in the advantage is to get the most pressure and damage in as possible before you're forced out of the advantage state. Due to DracoFighter's systems, this is shown most through combos and RPS mix-ups. For example, let's say you're Draco. You dodge an attack with your jump, then air-grab the opponent, causing you to gain the advantage. Air-Grab's max combo damage is done with Air-Grab > B-Attack > N-Attack, which leaves the opponent nearby with 35 less health. However, you can also drop the N-attack, instead opting for an Air-Grab > B-Attack, which leaves the opponent closer to you with just 25 damage. This closer distance will make it harder for the opponent to escape, and you can 50/50 them with either an N-Grab or B-Attack, which can lead into another combo if the opponent guesses wrong.
Learn your combos for max damage, but also be creative in how you approach mix-ups -- they can lead to more damage when the opponent least expects it!
The disadvantage stage is when a player is on the receiving end of the opponent's advantage state. If you're getting combo'd, are stuck in a corner, or are in your most disadvantageous state (e.g. Cyrus rarely wants someone to be right next to him!), then you're now forced to defend. Generally, the opponent will want to 50/50 you with either an attack or grab, since those are the 2 main types of attacks. Due to the RPS system, you can attack the opponent if you expect a grab, or block an expected attack. There is also risk and reward attached to your defense! Since attacks have grab immunity, getting a hard read on a grab means that you can launch the opponent while you're on the defensive, but if the opponent predicts this, they can block it and you'll be in an even worse spot! This is where the mindgames begin, and it requires a good understanding of the opponent along with quick gut reactions.
Always remember that backing off can be an option to escape the disadvantage -- otherwise, most cases can be solved with just a well-blocked attack or safe N-Attack!