The OnPlayerDying event is fired when a player character is reduced to 0 hit points or below, but is still above -10. This does not fire if a single source of damage reduces a player character from positive hit points to -10 or below (the OnPlayerDeath event fires instead).
The default script for this event (nw_o0_dying) simply kills the character (which is why there is no "dying" period during the official campaigns).