At the beginning of an encounter, all involved characters make a special Initiative check to determine turn order, and go in the order from the highest roll to lowest. An Initiative check is a special Reflex check + your Dexterity ability. In the case of a draw, have the characters who tied roll initiative checks again, the one who rolled higher goes before the lower. Initiative can be used to determine actions both in-and-out of combat; any time when you need to know who does something first (who speaks first, who grabs the cursed magic item first, etc.) have the contesting characters make a Reflex check for initiative.