"DPS" is "damage per second"--defense speaks to the number of seconds you can remain in battle.
Pokmon in go have an invisible level and attack and defense stats, and a visible HP stat. The "CP" score aggregates these three stats based on a pokemon's level. The level of a pokemon, though invisible, can be deduced easily enough.
Basically, in this game, a pokemon's stats are each equal to its base value for that stat plus its IV, this sum for each stat then being multiplied by the corresponding CPM for it's level.
Raising a pokemon's level increases a pokemon's figured stats because it raises a pokemon's CPM.
Combat itself probably doesn't perform calculations using the CP stat, likely instead using the invisible attack and defense stats.