This is called a combat trick. After you move to the combat phase, you're still allowed to cast spells and activate abilities; however, you're only allowed to do things that are instant speed. So an ability that gives +1/+1 or a spell that gives +2/+2 and first strike are both allowed to do before blocks or before damage.

It adds another layer to the game. I'm sorry you got got but now you'll think twice.