In 1937, the German Condor Legion wiped out the basque city of Guernica. Huge bomber planes like Heinkel were used to demolish the city. Fleeing civilians were slaughtered from the air. Hitler’s planes and Mussolini’s troops are one of the main causes why Franco did succeed in taking power of Spain.
The reason why Hitler sent Germans to Spain was to train them for similar missions in order to make his dream of "Lebensraum" come true. To be able to attack swiftly and move his troops around he needed to have a qualified air force to make way for his ground troops. The incident at Guernica showed him that his air force was capable of destroying cities. During The Spanish Civil War, Hitler was free to test new, more technologically advanced weapons and it is also said that Hitler used the war to develop his "Blietz-krieg", which means a "fast war".
Hilter wanted to get rid of what he called the communist disease in Europe. When he saw that Stalin tried to support a communist/socialist government in Spain, Hitler didn’t like that of course. At these times Hitler was also busy with other things. Of couse he wanted the world to focus on his affairs in Spain while he planned how to take Chechoslovakia, while he took power in Austria, while he marched into the Rhineland. He also attacked France orally and called their non-agression treaty with Soviet a plot against his Germany.
Mussolini wanted the area around the Mediterranean to be fascist. Therefore he took his means by supporting Franco.
Stalin was by now terrified of Hitler. If he could get Spain to be communists or at least socialists, it would mean much to his attitude to Germany. If Spain had become communists, that would have meant that Hitler’s troops weren’t ready at all for a war aginst his own country and he had stopped the spreading of the hatred against communists in Europe.
France and Britain desperatly wanted to avoid war with Germany. The Spanish Civil War was the start of the appeasement policy which was to last until Hitler invaded Poland in 1939. France was also afraid that similar unrest like in Spain could start in their country. Therefore they stayed out of everything. Neither France or Britain was prepared for a war at this moment.
After Franco won the war, there were lots of consequences. Hitler and Mussolini could now be sure that Britain and france were cowards and were no threats to their plans. Especially Hitler believed that as long as Chamberlain stayed in power, he could do anything he wanted, as long as he went east-bound.
Stalin was no even more terrified of Hitler than he was before. The Munich agreement made it even worse. He had to get Hitler to assure him that Stalin had nothing to fear. When Germany and Soviet signed their non-agression treaty, the areas between these countries was up for grabs. Hitler now knew that Italy, Britain, France, Spain and Soviet would do nothing if he stepped into Chechoslovakia.
Conclusion:
The Spanish Civil War showed us historians how the power balance of Europe had changed. After the 2nd World War and to 1933, France, Britain and Soviet controlled everything. Now they had been reduced to puppets in a one-man show against communism. Hitler used Spain to train his troops and to scare Russia. He knew that a war was inevitable. Together with him stood Mussolini and now, also Franco(at least Hitler thought so). On the other side France and Britain, the cowards. Their non-intervention in Spain led to a serious amount of errors and weak actions taken by France and Britain which eventually led to the start of World War 2. Soviet was in a way under Hitler’s controll. They had to approach him. He satisfied them, but he knew their non-aggression deal didn’t mean anything. The Spanish Civil War also showed us how Hitler had planned to fare war. He had a very reliable air force, many soldiers and he could move them around quikly. Therefore the term "Blietz-krieg". Also it came clear out that civilians would suffer immensly during the comming war. Therefore I would say that it is very true to say that The Spanish Civil War was a "dress rehersal" or a "generalprøve" for World War 2.