A leak down test is like a compression test, but you hook the tester up to your air compressor. It pressurizes the cylinder and then you measure how much is lost. When the air is being lost(if there is something majorly wrong it will be fast) you can open the oil cap and take off the intake pipe and see which one the air is coming out.

If the air is coming out the intake(and/or exhaust) then it is valves, if its coming out the oil cap its getting past the rings. Obviously the cylinder you are testing has to be at TDC.