yeah, I'm pretty curious about that instruction too. It would seem that they mean the second stitch from the tip. then do the YO, P2Tog, K2 and begin the process again. Bad use of numbers though, 'cause my logic would read "now slip the first stitch over the second" - But WAIT - do you have a picture of the pattern? Is this a bobble? Usually when you slip one stitch over another the instructions then say "and off the needle." Is it a lacy pattern or is there supposed to be a bobble?
Now I'm REALLY confused!