The first is the atonement of sin and imputation of righteousness through faith in Jesus and acceptance of his sacrifice on our behalf.
The second is the process by which a Christian grows in Christlikeness.
The third is the final removal of sin in its entirety and the presentation of our new bodies at the end of time.
Now, I was talking recently to a friend who's a bit of a legalist. Now, before you start getting up in arms about legalism and pharisees, this person wasn't a legalist in the historical sense, that is, one who seeks salvation through works and the law instead of through Christ's sacrifice, but rather, this friend was a legalist in sanctification. Mind blown, I began to ask, following a statement about comparing the present self to one's self in the past (in light of recession), about what it looks like, as a legalist, to look forward and compare oneself to Christ, as we are recommended to do by the author of Hebrews.
What I found to be interesting was that this friend didn't see sanctification, as I'd expected, to be a to-do list of ever-increasing magnitude and holy-seeming-ness, but a rather humble position. See, my friend saw sanctification as doing more as Jesus did, taught, and endorsed, through the power of the Holy Spirit. [my paraphrase].
This made me think about my own position, as I'm not a legalist, so I did a bit of thinking and came up with this: I view sanctification as, through the work and intervention of the Holy Spirit, being more as Jesus is, or to put it in another manner of phrase, increasingly taking on the essence of Christ, a view I decided to call Essentialism before later discovering that that was already a concept, with Theological Essentialism being very similar indeed. (I'm not claiming to be a TE-ist, just that I happen to thin like one in this instance. I don't know enough about the view to claim to be part of it)
Both of these views, I would say, have their benefits and deficits. One is more able to distinguish growth while the other is less prone to condemnation and doubt, but I wouldn't say either is completely unbiblical, either. That being said, I'm no theologian, nor am I completely unbiased.