a spike is any attack that hits your opponent down
falco has 2 spikes that I am aware of: Dair and phantasm (side b)
spikes are used to KO at low percentages but that doesnt mean they KO at all percentages
a good combo for falco incorporating a spike is CG (chain grab) your opponent until you get to the edge (hopefully you racked up enough damage on the way) and spike them after throwing them off the edge, i recommend using the Dair but if you can get the other to work in this situation go for it.
not all ways of hitting with Dair will spike though, so check the thread that give an analysis on his move if your having trouble getting it to spike, it's really quite easy though
a good way to practice is to go into training mode and set the CPU to a high damage so you hit them off the edge and practice spiking them when they come back.
Anyway if somebody else says something contradicting my information, I would trust them since I'm not 100% on everything i've said, but that is what i believe to be correct.