hi! It means that you're going to knit two stitches, and then MAKE a stitch... ou right, you are increasing. check out amy's video for M1L (it's next to the third diamond section on the scarf on the right side). It's very easy to do: use the tip of your right needle to lift the strand of yarn between the first stitch on the Lh needle and the last stich worked on the RH needle, place the loop on the Left needle, and knit into the back of it. The video makes it very clear, if the written directions are confusing (i think they are!) . Anyway, just keep doing that all the way around... knit 2, make 1, knit 2, make 1, etc.
the (30 sts) means you should have 30 stitches on the needle when you are done working that row/round.