k1 *yo, sl 1, k1, yo, psso the knit st and the following yo
You're passing the slipped stitch over the k and yo that you just made. When they say following, they mean the yo that followed the knit.
When they get on your right needle, they'll be in this order:
yo k sl
1. .2. .3
3 will pass over 2 and 1
The yo you drop on the next row is the first one--before the slipped stitch.
I hope I made sense, here.