s3 is the name of an existing sprite1 which is copied by this action.
The new sprite is given the name s2 and is placed at depth i1.
The depth of a duplicated sprite is not used the same way in Flash 4 and Flash 5+. The depth parameter in this function is not clearly documented anywhere, but it looks like you need to have a depth of 16384 or more for a duplicated sprite to work properly (this is not visible to the high level ActionScript users.)