actually both mthods work.
i assume you have a gap with 2 somestiches on top on a holder and some stitches below on a holder. there will be a small gap between to two rows with nothing going on right?
slide the stitches from the bottom holder onto your needle, when you get to the gap between the two stitch holders, stretch the knitting out a lttle so you can see the stitches clearly. find a good secure loop and slide it onto your needle. Make sure thet when you tug it it goesnt gape. Then slide the stitches from the top stitch holder onto your needle, continuing in a circle, at the end of the holder you are almost back to were you started, you just have a couple of other stitches to pick up beween in the gap jus like you did before.
Now you have everything on your needles then you can start knitting. There is no need to do anything special with the yarn, just hod it as you normally would with the tail off to the right leaving a nice long tail to weave in later and start knitting in the round.
sorry i couldnt describe it very well but there is a you tube video here that shows it very well, it is Cat Bordhi demonstrating a project which involves in the technique.
picking up stitches in a gap