Need help with a YO after a purl stitch followed by a knit stitch

How-to Questions
1

I am working (after starting over because I cannot read -_-) on this adorable waffle blanket. See waffle blanket on ravelry
I am having a little problem with the last YO of the second row, which goes as follows 2: P4, YO. This is followed with 5 knit stitches to create the border. My problem is that the last YO puts the yarn in the wrong place to knit a stitch. I tried it a couple of times and it never seemed to come out right…Does anyone know how this should be done?Also, on the third row (3: drop YO, YO, Sl1, K 3, PSSO) which direction should the YO after the drop YO (which is just literally dropping the stitch? That feels SOOOO wrong) should go, knit or purl ways? Thank y’all

2

Here is the pattern for the blanket I am working on. http://www.ravelry.com/patterns/library/waffle-blanket

3

The YO is an increase so when you bring the yarn forward bring it over the right needle to the back and knit. There is a video in the increase section. Link at top of page.

That’s a pretty blanket. The YO and dropped stitch will create the eyelets. You’ll probably need to do several inches for it to show well. Make a swatch if it helps…