KP Entrelac Felted Tote

Hi All!
I am almost finished with this tote bag from Knit Picks. http://www.knitpicks.com/Felted+Entrelac+Tote_PD50406220.html It’s worked from the top down and I’m at the part where you start the base.

It says:

Purl four rounds.
Next Round: Pick up and knit together with the stitch on the left needle and the bar from the last knit round.

OK. How do I pick up the bar from the last knit round (or do they mean purl round)?

Do they mean I should pick up the bar like a M1?

What does this row accomplish?

Any help would be greatly appreciated!!