Fana means becoming God; baqa means abiding in God's Life. In fana, one becomes a majzoob, a Brahmi-bhoot, meaning one is drowned in Divinity.
At the end of the First Journey [fana], the pilgrim is only superconscious; meaning, conscious only that "I Am God." In baqa [the Second Journey] one regains normal consciousness [gross, subtle, mental]. He is called a Jivanmukta or, as the Sufis say, salik. He is now God and Man. He experiences his Godhood continuously, constantly, and also his manhood. But as yet he does not live the Life of God. He cannot use the Infinite Knowledge, Power and Bliss that he constantly experiences for the salvation of others.
The Third Journey is for the very, very few rare ones, ending in Qutubiyat, the Sadguru state. Here the Realized One now lives the Life of God. He uses his Infinite Knowledge, Power and Bliss that he continually experiences. He has "brought down " the One into the many. He has brought down the Independent Reality into illusion.
The Fourth Journey ends in the Qutub's dropping his body, and yet eternally he remains consciously and individually God.
Explaining further, Baba continued:
One point more. The difference between the Avatar [Rasool, Prophet] and the Sadguru (Qutub, Perfect Master) is that the Qutub, after going through the whole process of evolution, reincarnation and Realization, "enters" and lives the Life of God, whereas the Avatar has not to go through the process of evolution at all. He directly "becomes" man.
In living the Life of God, both the Sadguru and the Avatar are equal. Both are leading God's Life, and at the same time both are at every level of life in illusion. Simultaneously, they are on the level of the lowest to the highest. The most important difference is that the Qutub acts on that level, and the Avatar becomes that. The Qutub or Sadguru, who is God, suppose he comes down to the level of a confessor and confesses to God; it means that God (in the human form of the Sadguru) is acting as a confessor confessing to God. He acts like a confessor, and yet while acting, he is conscious of his Godhood. The Avatar actually becomes the confessor at that moment, and yet while becoming an ordinary confessor, he still experiences consciously his Godhood, and both the Avatar and the Sadguru simultaneously retain [divine] consciousness of their Godhood.