After making your first form etc.
1. Create a New Form in Lazarus.
2. Place a TKOLForm component on the new form.
3. In Lazarus go to "Project->Project Options..." and select the "Forms" tab.
4. Make sure only your main form is in the "Auto-create forms:" list.
5. Use the following code when you want to show the form, and alter as necessary.
NewForm2(Form2, Pointer( Applet ));
Form.Show;//Display your main form after other form closes.
P.S. Thanks to Yury for answering my questions.
Update. The following code is enough to dynamically show other form: