Hello,
"Stage 1" (The bootstrap code) is part of the bootloader, not the entire bootloader. "Stage2" (Krnldr.sys) is the core part of the bootloader and is responsible for loading the operating system kernel in the series.
The series kernel is built as a PE-executable (EXE or DLL file output from MSVC, both will work as they are both the same format.)
Please see the
Stage 2 chapters, Chapters 7-11, for detailed information on what Krnldr.sys does. Also, please see
this chapter for detail information on how Stage2 loads and executes your MSVC kernel, and how to properly set up MSVC.