G' Day Radagaisus,
This is a little dated since I've been on detached service in the 18th Century working on Post Captain, but I thought a little clarification would be useful for those who want to employ the more detailed air-to-air rules, which many do - Coastal's opinion not withstanding...
[BTW, for once the movies got it right; time travel is indeed stressful.]
OTD (On The Deck) is an altitude level lower than Level 1 (3,000 ft) as noted in Section 2.5.1. It is also employed for aerial torpedo attacks per Section 2.11.1 and strafing in Section 2.12. Thus a dogfight at Level 2 would descend to OTD, as would a dogfight at Level 1. This is specifically detailed in Section 2.8.2 Amended Fighter Combat on page 5-8 in step 6, "Once the dogfight is reduced to On The Deck altitude, the opponents remain at this altitude Level."
The Firing Pass and the Dogfight are alternative means of air-to-air fighter combat, each with separate requirements, resulting in different tactical advantages and drawbacks. For example, the firing pass is a good interceptor tactic when you have a fighter with good firepower, but can leave you vulnerable to counterattack, while the dogfight is good for tying up opposing fighters, but can be dicey if the opposing fighters have a better ACE. You get the idea. These are mutually exclusive alternatives chosen by the attacker when the attack is initiated. Once the combat is completed, you can switch tactics in a later AP.
The fighter combat process described in the basic rules in Section 2.8.1 on page 2-6 and Section 2.8.2 on page 2-7 is a streamlined, summary approach for those who want to quickly resolve air combat without getting into the details, while the process described in the Amended Section 2.8.1 on page 5-7 and Amended Section 2.8.2 on page 5-8 provides a detailed simulation of fighter air combat. Some of us like to simulate the details of air ops, while others like Coastal prefer to focus primarily on the ships. Chose the approach you prefer, and feel free to shift to the other depending on the significance of a given situation.