This stage is located after 'Graveyard Level 8'. On 'Nightmare' difficulty your character will be capped at Level 30.
When you start the level, Sarkon will start off surrounded by smaller skeletons, grab a weapon pick-up and commence destroying all the enemies on screen. Sarkon will throw a bone at you sometimes (later increasing to 3) so just dodge these and shoot him.
When you have done enough damage to him he will also crawl towards you to a different spot on the stage. Again very easy to dodge this but he will be invincible when he does this so just spend your time killing the smaller enemies during this time.
If you are going for the 'Complete all difficulties' and related achievements, you need to only complete the three boss fights on every difficulty (Normal, Hard & Nightmare).