I believe its about net calory.
The general gizz of all the readings I have done so far is that you should be looking at 300-500 calorie deficit per day from your BMR (around 0.5kg per week at 3500calorie) you can go on a higher deficit, but seems like 1000calorie seems like the absolute max, and may run into loosing both fat and muscle, resulting in what they call skinny fat...
For me, I have worked out my BMR is approx 2700-3000calorie per day, and since I have been on my diet of 1500calorie, and daily classes averging between 750-1000calorie burn each day, I had lost a bit of weight at the beginining (about 3kg of water weight) then sort of slow down alot after that. What I have also found is my legs are getting tired easier than before... (maybe over training?) but I would say its just not enough calorie for me to have the energy
Last week I have bump my calorie up to 2100calorie but using Protein powder and milk for breakfast and before bed (slow release)... I also added in some weight training to keep me from loosing too much muscle from the weight loss... so far this week I had a 2kg lost?!? (looking at my log, I was 110.6kg on the 20/10, and is now 108.4kg today)... so I guess its working
but most importantly... drink lots of water... it helps