Stage 2 loader initializes protected mode, detects system memory, loads stage 3 and kernel from the floppy and jumps to stage 3.
Stage 3 is supposed perform initialization in protected mode. It should be called stage 2.5 because it's the same thing but 32 bit binary, it reloads GDT to predictable range, initializes IDT, tests #DIV exception and and eventually jumps to kernel.
The kernel prints a welcome message and loops infinitely.