"I'm telling of you" meaning I don't like you and I am going to report your (real or made-up) bad behaviour to the teacher who likes me best and you least. Ha ha. I'm telling of you.

If you see some geniune badness, and you are very young or naive, then your mouth will drop open, your eyes widen, and the only word you will be able to summon is a breathless "tell-ing". Then you will run in a random direction until you hit something.

Telling can also be used as an effective bullying device. Tell someone younger, smaller or nerdier than yourself that you are 'telling on them', despite the fact that they have done nothing wrong, and they will royally cack their pants and begin the word "but" around twenty times before hiding.
This technique also forms the foundation for a defense to a straight-forward "telling". Simply scream "telling" just as loudly, and start a race to the nearest teacher. Of course, if you make it to the teacher you'll have to make something up pretty quickly, or admit that you were both running around screaming "telling", which may reduce credibility in future games of "telling".