Plasma cutters generate the plasma in one of two ways: High-Frequency (HF) Contact or Pilot Arcs. Which one your plasma cutter uses depends on how old it is; the new high-tech machines use pilot arcs. The main difference is that HF Contact models must close a circuit with a work piece that conducts electricity in order to cut whereas the pilot arc models can cut anything. They work in very different ways.
HF contact method of creating plasma is still found in low budget plasma cutters and in older plasma cutters. How it works is the plasma cutting unit is connected to the work piece by a clamp and cable and when you touch the nozzle of the torch to the work piece an electric circuit is created. An electric arc zips from the work piece threw the plasma torch nozzle to the negative electrode inside the torch head. At the same time, pressurized inert gas flows in the opposite direction, from the torch head out onto the work piece. As the gas surges past the zapping electric arc it is heated to around 50,000 degrees Celsius. At that temperature the gas becomes plasma which is a form of matter that is a liquid and a gas at the same time. It is this super-hot, super-fast moving plasma that cuts the metal. The HF contact method is said to have one cycle because the main plasma flow is generated in one step.
The Pilot Arc method is a two cycle process. First, a high voltage, low amperage circuit is used to make a small, high-intensity spark in the body of the torch which produces a small pocket of plasma in the torch head (note that the plasma is already generated in the torch without the need to touch the work piece, this is what eliminates the need for a conducting work piece). Now, you can use a trigger to ignite the main plasma arc that will be used for cutting whatever it is you want to cut. Pilot Arc is the method used in CNC plasma cutting applications.
There is a difference in cost between these two systems, so keep that in mind while you are shopping around.