Help! pattern issue

Hi everyone I’m having an issue with what this patterns means when it says k3 [dropping one loop of (yo) twice.] Pass 3rd st on right-hand needle over first 2 sts.
The pattern is for a bag so I’m assuming its supposed to be an elongated stitch, but am totally lost. This is my first bad. The previous row I increased using k1.p1 k1 in next st.

If anyone can help that would be so wonderful! Thanks!

Welcome to Knitting Help!
It sounds like you also had double yarn overs in the previous row? In this row you’ll possibly drop one loop of the yo, knit the other loop, k1, drop one loop of the yo, knit the other and then pass the rightmost stitch of the three on the right hand needle over the other two. (They number the sts 1-2-3 as they appear on the right needle so #3 gets passed over # 1 and 2.)
If there are no yarn overs in the previous row but only the double increase, k1p1k1 in a stitch, I’m puzzled too. Can you quote the entire 2 rows only? or can you give us a link to the pattern or a pattern name?

Sorry for not responding sooner. The previous row was a K2, yo twice row. After I read what you wrote and looked at the pattern again I was able to figure it out. Yay! Cant wait to check out all this site has to offer! Thanks again for the help!

Stuck on K3 (dropping one loop of (yo) twice)Pass 3rd st on right hand needle over the first 2 st
???
Previous row was k2. (Yo) twice k2 repeating from yo twice.

The yo gives you extra yarn in the stitch. On the current row knit 3 and let one of the double yarn overs drop from the left needle before you knit it. Now look at the sts on the right needle and count to the 3rd stitch from the end. Pick that stich up with the tip of the left needle and pass it over sts 1 and 2 and off the needle (similar to binding off).
Can you give us a link to the pattern or a pattern name?

It is a sugar and Cream pattern for a market bag

Maybe one of these?
http://www.ravelry.com/patterns/search#sort=best&query=market%20bag%20lily