I've heard thats how you get items from people without killing them. How do you do it? Whenever i try, it says that this character is in combat.

you have to calm them by using the calm humanoid spell but most of the time it don't work, depends on your luck to find items on them and if they are wearing armour or have a weapon you will have to use the disintegrate weapon and disintegrate armour spells then calm them and pick pocket them

tho it would be sweet if you could steal peoples weapons and armor when they're knocked out