Threat levels are individual dungeons/stages that are analagous to "acts" in Sonic the Hedgehog games or "Stages" in Super Mario Titles. They are the shortest increment of gameplay from which one can get a reward Item, and can be chained together to increase the level of the item received. They are concluded by a "Horde" battle in a seperate arena, at the end of which the player must defeat a "Pit-Boss", if the stage ends in a -1, -2, or -3 or a Destructor if the stage ends in a -4.
Threat Levels are subdivided into "planets" similar to Zones or worlds in Sonic and Mario respectively; this is the first digit in a code, where the second digit represents the individual threat level. (I.E. Planet 2 Threat level 4 is 2-4). Difficulty Modes are fairly self-explanatory, in that depending on which one you played, the difficulty is adjusted; There are three, in ascending order of difficulty: Onslaught, Invasion, and Apocalypse.