Maseches Sotah, Chapter 5, Mishnah 2. This mishnah, along with the rest of the mishnayos in this chapter, has nothing to do with the subject of Maseches Sotah. They all open with the words "bo bayom" (on that day), and wherever the Mishnah uses this expression - here and elsewhere - it refers to the day on which Rabbi Elazar ben Azaryah was appointed head of the academy in Yavneh in place of Rabban Gamliel. Until then Rabban Gamliel had limited who was permitted to enter the study hall, and on that day entry was opened to all the students. An enormous amount of Torah was learned that day, and special halachos emerged from it - a unique day in the history of the era of the Mishnah.
Rashi explains the connection to the previous mishnah: the dispute about the source for the fact that the adulterer is affected as well - both regarding the punishment and regarding the woman becoming forbidden to him - was also stated on that very same day.
Rabbi Akiva's Exposition:
"Bo bayom darash Rabbi Akiva" - on that day Rabbi Akiva expounded the verse stated regarding the tumah of earthenware vessels: "V'chol kli cheres asher yipol meihem el tocho, kol asher b'tocho yitma" - any earthenware vessel into which a tamei item has fallen, for example a dead mouse, everything inside it becomes "yitma." And what does "yitma" mean?
Here Rabbi Akiva made a precise inference: "Eino omer tamei ela yitma, l'tamei acherim" - the verse does not say that the items that entered the earthenware vessel merely become tamei, that is, that they were only affected, but rather "yitma" - that they have the power to render others tamei. From here: "Limed al kikar sheni shem'tamei v'oseh shelishi" - a loaf of bread that is a second level of tumah has the power to make another item a third level of tumah, a third degree of tumah.
And this is how it unfolds:
A dead mouse is a sheretz, which is considered an av hatumah - a primary source of tumah.
Its very presence in the airspace of the earthenware vessel makes the vessel a first level of tumah.
A loaf of bread baked in that same earthenware oven becomes a second level of tumah, because it was affected by the first level, namely the earthenware oven.
About this the Torah says "kol asher b'tocho yitma" - everything that is inside the oven. And it does not say "tamei," meaning that it was merely affected and is a second level, but rather "yitma" - that it has the power to transmit the tumah and make another item a third level.
Rabbi Yehoshua's Response:
This very exposition is the subject of a dispute, as the Mishnah notes: "Amar Rabbi Yehoshua: mi yegaleh afar mei'einecha, Rabban Yochanan ben Zakkai?" - Rabban Yochanan ben Zakkai had already passed away, and Rabbi Yehoshua calls out, as it were: who will remove the dust from your eyes, who will restore you to life, for you used to say: "Asid dor acher l'taher kikar shelishi, she'ein lo mikra min haTorah shehu tamei" - a future generation is destined to declare pure a loaf that is a third level of tumah, because there is no verse or source in the Torah for it.
The law of a third level of tumah applies only to something that is Terumah, and this is the halachah we hold: with Terumah there is a level of third, and with other items there is not. And Rabban Yochanan ben Zakkai said that in the future there would be others who would say that even with Terumah there is no need for a third level of tumah, since there is no source for it in Scripture - "she'ein lo mikra min haTorah shehu tamei."
And now the exact opposite has occurred: "U'va Akiva talmidcha u'meivi lo mikra min haTorah shehu tamei" - Rabbi Akiva, your student, brings a source from the Torah for the tumah of a third level, and even for something that is not Terumah, since the verse does not speak explicitly about Terumah, and he seemingly proves that there is a third level. And this is from what is stated, "kol asher b'tocho yitma": everything inside the earthenware vessel or oven will not only be tamei, but will even be able to render other items tamei.
In summary: in this mishnah we learned about Rabbi Akiva's exposition on the day of Rabbi Elazar ben Azaryah's appointment, in which he derived from the word "yitma" that a second level of tumah transmits tumah and makes a third level; and about Rabbi Yehoshua's response, which set that exposition against the words of Rabban Yochanan ben Zakkai, who held that there is no verse in the Torah for the tumah of a third level.