Mini sweater question

I am making this pattern. http://everwhelming.blogspot.com/2007/11/tiny-sweater-with-pattern.html
I know nothing about sweater construction.
Do I need to use 3 sets of DPNs, so that I can “set aside” the body of the sweater and make two sleeves?
When she states, “Knit the next stitch together with a body stitch” is she saying to k2tog with one stitch from a sleeve and one from the needles that have the body stitches on them?

I feel like a giant dunce and I am wondering if all sweater patterns are as confusing as this one.

[I]Do I need to use 3 sets of DPNs, so that I can “set aside” the body of the sweater and make two sleeves?[/I]

no. You can set aside the sweater body on either a couple spare needles (any size) or a couple of stitch holders (basically big safety pins designed for knitting) or some spare yarn. For example, if you decide to use stitch holders, put half the stitches (12 sts) on one stitch holder and the other half on the other.

When you finish the first sleeve, you can put 5 sleeve sts on one of the stitch holders and the other 5 on the other one.

Then your dpns are free to knit the final sleeve.

[I]When she states, “Knit the next stitch together with a body stitch” is she saying to k2tog with one stitch from a sleeve and one from the needles that have the body stitches on them?[/I]
yes. You’re exactly right.

[I]I feel like a giant dunce and I am wondering if all sweater patterns are as confusing as this one. [/I]
Don’t feel that way. You’re selling yourself short.

Some sweater patterns are more confusing, some less. By the way, the sweater construction for the mini-sweater is one of the common ones. I think it’s fine for a mini-sweater, but I don’t like this type of construction for regular-sized ones. But, as you knit more sweaters, you’ll probably find which styles you like best.

I just wanted to add if you like making these little mini sweaters, Berroco.com has a bunch of patterns. they just came out with a set for 2009 and there are at least 2 others.
http://www.berroco.com/knitbits/html/KB319.html
Very cute as tree ornaments, gift box decorations, little gifts to friends.