Help w/School Colors for Baby

Hi all,
I am working on School Colors for Baby from Creative Knitting Sept 2007. I am having a lot of trouble interpreting part of the pattern.

I have done the first part which is called “Lacy Border”. For the first part of Lacy Border, you pm after the first 3 sts and before the last 3 sts. Then you follow the Lacy Border pattern. On the last row you pm 12 sts from each edge.

The next section is called Slip St Border. It says: "Work in pat to 2nd marker, place these sts on holder for right outer-side
border, knit 138 center sts; place last 12 stitches on holder for left outer-side border.

Here is my questions - When it says “work in pattern”, does it refer to lacy border pattern (the pattern established on the needles)? Or Slip St Border (the pattern that I am supposed to be starting)?

This has been driving me crazy! Thanks for your help :slight_smile: