That's a sweet machine! It just does straight and zig-zag, but should make a great stitch. The presser foot tensioner (on the top/left) needs to be pushed down so there's enough pressure to pull the fabric through. The lever on the front/right is your stitch length. And the dial on the front/middle is your stitch width.
The holes in the top of the machine are for oiling. Open the door on the left end and oil in there, and in the bottom of the machine. It looks like it's in pretty good condition -- the bobbin winder tire looks new and the paint doesn't look scratched. Clean up the bobbin area and have fun sewing.