The big deal behind FFVIII's battle system is Junctioning. It takes the place of the traditional armour and add-on system, allowing you to tweak and balance your party's stats to maximum effect.
Characters can junction any magic they have to any available statistic. Their entire stock of that spell is then locked to the stat, hopefully enhancing it. Each magic can only be junctioned to one at a time, and each attribute can only have one spell junctioned to it, so it's important to balance them out. It's also important to note that Junctions are dynamic, and drawing or casting junctioned spells in battle will increase or decrease the stat respectively.
The slots available for use are determined by the abilities of the GFs junctioned to that character. If one of them knows HP-J, for example, then their owner is able to junction spells to increase their hit points.
For the raw and dirty data on this system, visit the Attribute, Element, or Status Junction pages.
