Select a two player game and enter the Vs. screen.
Press Y, B, and A on controller one to select the first three characters of the Kode,
And those same buttons on controller two for the last three characters.
Enter a valid Kode before the Vs. screen fades.
Pressing a button will cycle the specific character to which it is assigned:

Character Abbreviation Presses
Dragon D 0
MK Logo M 1
Ying-Yang Y 2
Three 3 3
Question Mark ? 4
Lightning Bolt L 5
Goro G 6
Raiden R 7
Shao Kahn K 8
Skull S 9