I'm assuming your xml file is set up as follows (or close to this):
<employee>
<EmployeeName>Tim</EmployeeName>
<ManagersName>Tom</ManagersName>
etc...
</employee>
<employee>
<EmployeeName>Jim</EmployeeName>
<ManagersName>James</ManagersName>
etc...
</employee>
So what you want to do is add an expression for the default value that you want to set. If you want to set the value of Manager's Name in your form, you will add the following expression to the default value:
ManagersName[EmployeeName = EmployeeName]
ManagersName refers to the element in the secondary XML. You then add a filter to that (that is what is on the square brackets of the formula). One EmployeeName refers to the element of your main data source, and the other refers to the element in your secondary data source. You can call them whatever you want, I just made them the same name so it would make more sense. Use the formula builder to select the different elements and to add the filter.
Let me know if you have anymore questions!