The Stutter Step is not the best weapon in a fight, but it does show coordination and can work in the strategy part of a battle. Every character can stutter step, but in KOF2K1, the backwards walk has been slowed down, thus making the Stutter Step a bit slower, but the backward walk of the stutter step can be replaced by the crouch. The aim of the Stutter Step in to hit forward and backward repeatedly so you only see very few, if not just 1 of the frames. After a few seconds of hitting forward and back, immediately hit the crouch and repeat the forward and backward taps.

Now to perform the Stutter Step you need a good, quick hand and extremely soft control on the joystick. You need to flick the joystick repeatedly, but softly forwards and backwards and randomly sticking a crouch in there. To know that you're doing the Stutter Step correctly, you should see your character stuttering, as in you should see about 1-2 frames of a forward and backward with a quick crouch repeatedly. If you are doing in exceptionally well, your character should look almost like he / she is gliding for a few frames. 

 

Now, even when you master this, it doesn't mean your invulnerable. It also doesn't mean that you are going to win nor does it mean your a expert. The real test is putting it into a match. The purpose of a Stutter Step in a match is to confuse or just alert your opponent, whether it be after a massive combo you pulled or in a tight situation with 4 seconds on the clock and both of you at chip damage health left or just for pure fun at the start of the match. But, in a match, most people won't let you Stutter Step after they see it for a few seconds. Unless they know some tips of their own, they won't do anything. Some players will even Stutter Step with you, if they know how to.