Unlock Potential is an empowered state of being brought upon either by surviving drinking the Ultra Divine Water, or Grand Elder Guru or Babidi drawing out a target's dormant power, thus allowing them to use their full potential at the time.
During the King Piccolo Saga, Goku has his potential unlocked fully by drinking the Ultra Divine Water, causing the image of a Great Ape to surround him on multiple occasions: signifying Goku's hidden power having been released.
Much later, during the Namek Saga, Krillin and later Gohan both have their potential unlocked by Grand Elder Guru, greatly increasing their power.
Later still, Babidi displays the ability to draw fighter's abilities beyond their limits after he takes control over them, resulting in their veins bulging to the surface of their skin. Yamu, Spopovitch, and later Vegeta all gain this power up.
Due to functioning as an improvement to the user's base form, all people who achieved this state continued to use it for the rest of their participation in the series.
Even after having their potential unlocked, if the individual has transformations they can still use them to boost their power, as Goku, Gohan and Vegeta did after having their potentials unlocked.
In Dragon Ball Z: Resurrection ‘F’, Gohan, having given up on fighting to pursue a career as a scholar, was no longer able to access his Potential Unleashed state and was not even completely sure if he could transform into a Super Saiyan. In the Golden Frieza Saga, due to losing most of his power after having ceased training entirely, Gohan had to utilize his Super Saiyan form as a last resort. This was because it caused a huge strain on his under-conditioned body. From his brief performances in Super Saiyan, he was able to knock down Captain Ginyu in Tagoma's body and single-handedly act as a beacon for Goku's Instant Transmission. After Frieza's defeat, Gohan, ashamed that his own laziness got Piccolo, Videl and Pan killed by Frieza, had Piccolo retrain him in order to properly harness his power again.
By the time of the anime version of the Universe Survival Saga, Gohan was again able to properly uses his Super Saiyan forms with no adverse effects, using Super Saiyan to score a tie against Lavender. In final preparation for the Tournament of Power, Gohan resumed training with Piccolo. Despite accessing Super Saiyan 2, the Namekian mentor proved able to easily overpower Gohan, nearly killing him in several skirmishes. It was not until Piccolo reawakened Gohan's inner drive and fighting spirit that Gohan finally became able to fully access his ultimate power again, once again entering his Potential Unleashed state and quickly defeating Piccolo. Wanting to get stronger and test their strength even further, Gohan and Piccolo went on to spar with Goku and Tien Shinhan. Later, Gohan and Goku decided to train a little more without Piccolo and Tien. While Gohan and Goku transformed beyond their previous Super Saiyan forms, Gohan's Potential Unleashed power was at a certain level that allowed him to hold his own against Goku's Super Saiyan Blue power. However, Goku transformed further into Super Saiyan Blue Kaio-ken and knocked Gohan out cold with a single blow.
Video Game Appearances
The Unlock Potential form appears as a transformation for Kid Gohan and Krillin in several video games, including the Budokai series. In Dragon Ball Z: Budokai 3, Goku and Piccolo can also have Guru unlock their potential, but this is just a minor plot point in the Namek Saga and is not actually reflected in-game.
In Dragon Ball Z: Super Saiya Densetsu, Yamcha, Tien, and Chiaotzu can all get their potential unlocked by Guru if they survive to Namek.
In Dragon Ball Fusions, it is a status buff called Release granted by the Unleash Potential Special Move which can be used to unleash an ally's potential to grant them the "Release" status which allows the released ally to deal 1.5 times damage during their next turn.
"The ordinary range for Attributes is 1-100, but as you've visited Guru, this range has been expanded to 1-125."
— Dragon Ball Xenoverse 2 Unleashing Potential Tutorial description
In Dragon Ball Xenoverse 2, a time rift forms around Guru's house on Namek. While investigating this anomaly, the Future Warrior can help Nail defend the Namekian Dragon Balls from Frieza's invading army. If they are diligent in their defense of Guru's house, then they will be allowed to meet Guru who will use his power to unlock their potential which will increase their attribute point limit from 1-100 to 1-125. This increase is just a stat upgrade and is not considered a transformation in Xenoverse 2. This status increase is called Unleashing Potential in its Tutorial description.