Lua code for stuf, what do i do with it?

[Rusken]

As the title says, i want my targets name to be shorten if the name is to long, like Raider's Training Dummy would become R. T. Dummy.
I found a thread on MMO about this and a guy said that this would do it ->

Originally Posted by Code function(unit) local name = UnitName(unit) or unit name = name:gsub('(%S+) ',function(t) return t:sub(1,1)..'.' end) return name end

I do however don't have a clue what to do with this text, im quessing i should paste it in to stufs text.lua somewhere?
Could anyone give me som help with this? I really suck at this
I also wonder how it would look if i want the name to be class colored?
Thanks!

[Seerah]

In stuf's options for the text areas on your frames, you can choose to use Lua code instead of the built-in tag system.

[Rusken]

Ah, awesome!
So now to the second question, how do i make it class colored?
I would also want it to look like this -> Name | perchp