L stands for Line Level - generally low gain structure for instruments, cd players, audio cards, and various other sources.

M1 is normal microphone gain - for most microphones, guitars, and basses.

M2 is high microphone gain - This is for lower-output microphones or quiet conditions where you need to make up some gain in your mics.

* Please note the Gain knob works for each of the gain positions, but the range is adjusts is differnt.