Help with Lace Pattern

I am knitting a lace pattern baby blanket. For the second row, it calls for this:

K4, *YO, drop the next loop, slip 1

knitwise, K3, pull slipped stitch over all 3 stitches*

repeat from *to * to last 4 stitches, K4.

Do I pull the slipped stitch over the combined 3 stitches or pull it over each stitch one at a time? It seems to be leaving a large gap when I pull it over the three combined stitches…

Hi and welcome to KH. As written, it seems to mean that you are to to pass it over all 3 sts at once, the idea being to make a hole on purpose. Can you link to your pattern? That’s always helpful.

Using a backward loop cast-on, cast on 72 stitches.

Knit three rows.

Lace Pattern is worked over four rows.

Row 1: K4, P4, YO repeat from * to * to last 4 stitches, K4.

Row 2: K4, YO, drop the next loop, slip 1 knitwise, K3, pull slipped stitch over all 3 stitches repeat from *to * to last 4 stitches, K4.

Row 3: K4, Purl across to last 4 stitches, K4.

Row 4: Knit across all stitches.

Continue in this pattern until work measures approximately 31inches or you have reached desired length.

Knit three rows.

Bind off stitches loosely and weave in ends.

Unless another, more experienced and knowledgeable knitter says otherwise, I’d pass the stitch over all 3 knit sts at the same time. That is what will make the holes that will produce your lace pattern.

Welcome to KH!
Yes, I agree with GG, slip over all 3 knit sts and off the needle.
Would you please also edit the pattern you’ve quoted? The 4 rows of the lace pattern are sufficient. Many thanks.