I was reading a blog post by Steve Laube, a literary agent well known in ACFW circles. He was describing the editorial process, which proceeds in several stages. First, your editor gives you a big-picture edit, also known as a developmental edit or a substantive edit. This addresses plot and other large issues.
Once you’ve completed the rewrites and you and the editor are satisfied, you move to the line editing stage. This may also be called a substantive copyedit, looking for content issues. Are your place names accurate? Does your character’s middle name change halfway through? How about her hair color? Note this can be called “substantive” too. Find the terminology confusing? Be sure you know what you’re getting when you sign up for editing!
Thirdly, the copyedit, looking at grammar issues of all kinds.
And finally, the finishing polish: proofreading, looking at those em dashes and other tiny sticking points.