Dhalsim is probably the most complicated Capcom character to appear in CvS2. Each punch and kick has at least two functions depending on direction of the joystick. When the joystick is in neutral or directed forward, Dhalsim's limbs will stretch. When the joystick is directed back, Dhalsim's attacks will not stretch and be at normal length.
It is also important to know that Dhalsim's limbs do not hit his opponent, only his fists and hands. This means that stretched attacks will completely miss a close target making them useless at short range. Useful Normals:
Jab does a stretched punch that hits the 5 o'clock position below and to the front of Dhalsim.
Strong does a stretched punch that hits the 3 o'clock position directly in front of Dhalsim. Mainly used for air-to-air.
Fierce does a quick stretched punch that hits the 4 o'clock position below and to the front of Dhalsim. 10 frame startup and respectable 1100 damage.
Short and forward both do a stretched kick that hits between the 3 and 4 o'clock position below and to the front of Dhalsim. Good for surprising people as you float down from a jump.
Roundhouse does a stretched leg with massive range that strikes the 2 o'clock position. Good for air-to-air and for surprising jump happy characters like Sakura, Rolento and Vega.
-Stretched- Fierce does a stretched punch with both arms that spans 3/4 the screen. Not to be abused as it has heavy recovery and only above average priority. Will lose or trade with most high priority pokes (cammy s.rh, sagat c.fp). Useful for doing guard damage or to punish rolling after a yoga fire. 28 frame recovery.
Short does a stretched kick that's angled forward and down. 8 frame startup and an above average poke.
Roundhouse is probably one of the most annoying normals in the game. Extends nearly full screen and is angled slightly upward. Stops most early jumps cold and is very fast. Good to use after yoga fires to prevent jump-ins and extremely hard to predict.
B+Jab does a quick poke in the air. One of Dhalsim's many AA options and can be canceled to level 2 or 3 yoga volcano. Very good priority.
B+Strong does a quick chop in the air. One of Dhalsim's many AA options. Very fast with a 3 frame startup and useful for defending against crossovers. Very good priority but will still trade or lose to a few noteworthy jump-ins (Iori j.rh, Yamakaki j.rh?).
B+Fierce does a headbutt. This is one of Dhalsim's most useful normals as it's pretty fast, has a 4 frame startup and hits twice. It can also be buffered into supers and is useful for corner trapping coupled with short slides.
B+Roundhouse is a knee to the chest of the opponent. Useful for corner pressure, guard crush strings and combos. Can be canceled into yoga flame/fire/supers.
=Yoga Fire= QCF+P: Strength of punch determines speed of fireball. Fierce yoga fire is probably the fastest projectile in the game. 14 frame startup on all versions with 42/43/44 frame recovery. Great for zoning and chip/guard damage.
=Yoga Flame= HCB+P: Strength of punch determines duration that flame stays active (20/41/56 frames). Good when used at max range for pressuring, especially when RC'd. Very punishable up close due to heavy recovery. Will neutralize normal projectiles.
=Yoga Blast= HCB+K: Strength of kick determines duration that flame stays active (12/20/28 frames). Average anti-air with lk version being most useful (19 frame startup). Difficult to time due to slow startup and should not be used against characters with very fast jumps (vega, benimaru, etc.). Will not neutralize parallel to ground projectiles and does not hit most grounded targets.
=Yoga Teleport= DP+3P/3k or RDP+3P/3K (F,D,DF or B,D,DB): The famous yoga teleport that can be done in the air. DP motion moves Dhalsim towards while RDP moves Dhalsim away. 3 punches move Dhalsim a short distance while 3 kicks move Dhalsim a longer distance. Fairly slow and punishable when misused but excellent for escaping or zoning.