The Fender Stratocaster models have three knobs and right next to it a selector switch.
If you notice on the Stratocaster it has three pickups, the five way selector switch chooses between these pickups. I believe that the five positions are:
2-neck + middle
4-bridge + middle
now for the three knobs, the top knob is volume. the other two are tone controls for the selector switch to alter the tone coming from the pickups.
Now the actual bridge on the Fender Stratocaster has a little screwhole on the side of where the jack plug is, your tremelo arm goes in here.
By the way all the other copies of this great guitar have the same layout, they just sound worse