here is what the pattern says...
8.5 sts = 4 inches and 12.75 rows = 4 inches with 2 strands yarn held together in pattern stitch, blocked.
The blocking is necessary to open up the lace pattern.
Be sure to make a gauge swatch; block and measure on flat surface.
Is this saying after I make a little swatch, the 8.5 st after blocking is equal to 4" then does the 12.75 rows = 4 inches, is this before blocking?
This is the pattern link http://knitting.about.com/library/weekly/aa082905.htm