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Knitting instruction on Caron Simply Yarn Patter

Hi, I need help in reading the instruction for Lacy Tank knitting pattern for Caron Simply Soft, hope that someone can help me. I am using the same yarn and needle, but cannot figure out how to work on row 3 for the Lacy Rib. In row 2, after dropping the remaining YO, there is another new Yo add on, but when I knit row 3, the instruction did not mention how to deal with that YO, just "knit slipped St, inserting needle under both yarn-over strands and into st, k3", I am so confused about that, I have been thinking whether to knit all the YO with S1 together, but it does not work. If anyone know that, please kindly advise me. Thank you so much.

Lacy Rib (multiple of 4 sts + 3)

Note: The yarn-overs in this Stitch pattern provide the extra yarn needed to produce the 'eyelets' on each side of the slipped st, and to allow the slipped st to become elongated as it is slipped; they are not worked as sts. On Rows 3 and 6 the yarn-over strands are incorporated into the slipped st as it is worked.

Row 1 (RS): K3, * yo, slip 1, yo, k3; repeat from * across.

Row 2: P3, * yo, slip [first yo and next st, drop remaining yo], yo, p3; repeat from * across.

Row 3: K3, knit slipped st, inserting needle under both yarn-over strands and into st, k3; repeat from * across.

Row 4: P3, * yo, slip1, yo, p3; repeat from * across.

Row 5: K3, yo, slip [first yo and next st, drop remaining yo], yo, k3; repeat from * across.

Row 6: P3, purl slipped st, inserting needle under both yarn-over strands and into st, p3; repeat from * across.

Repeat Rows 1 – 6 for Lace Rib.