That's a really weird instruction
. I'd just leave those heel stitches on the dpn that you have them on, and use an empty dpn for picking up stitches along the heel flap edge. The instep stitches are the ones that were on hold while you were doing the heel flap. Those will be the stitches that you knit immediately following picking up the stitches. Then, take another empty dpn and pick up stitches along the other edge of the heel flap (the same # of stitches as the first edge, very important) Finally, knit HALF of the stitches that were left after your heel turn, looks like that's 7 stitches according to your pattern, and that point is now the new beginning of round.
It says to place markers on either side of the instep stitches, but that's not really necessary if you are working on dpns. On dpn#1 you will have half of the heel turn stitches and the stitches you picked up on the first edge, on dpn#2 you will have all of the instep stitches, and on dpn#3 you will have the second set of picked up stitches and the other half of the heel turn stitches. For the next set of instructions where you are doing gusset decreases you will do them at the end of needle #1 and at the beginning of needle #3 instead of before and after the markers as your pattern tells you to do (if you were working on a circ).