Without getting too complicated:
NCTR, based on database, determines what aircraft your radar sees. You can look up the specifics on how NCTR works if you like.
So for a hostile contact you have multiple "sensors" to determine if the bogey is hostile. This varies based on ROE in real life and I won't get into those specifics. In game you need to have more than IFF for a bogey to be hostile.
It can be an AWACs, other fighters, etc... Think of it like two-factor authorization when accessing a website, game, server etc...