cast on 2 sts
1st row: knit
2nd row:inc1 st in 1st st. K1
**3rd and 4th rows: Knit
5th row: Inc 1 st in 1st st. Knit to end of row. ** Repeat from ** to ** to 8 sts on needle
When it says inc1 in 1st st. It means to increase one in the first stitch. That means to make the first stitch into two stitches. See the videos about increases on the purple bar above. You could knit in the front and back of the stitch. That is a common one. So after row one you have 3 stitches.
Rows 3 and 4 you are just supposed to knit those 3 stitches. That is where you have the stars **. These stars indicate the place you are to repeat from in the instructions after row 5.
So don't do anything with them the first time you go by them. Go on to row 5 where you increase in the first stitch again. So now you have 4 stitches. Then it tells you to repeat the stuff between the two sets of ** **s. So you back to where it says rows 3 and 4 and knit those rows again, then repeat row 5 again, which is the increase row. Then you keep repeating the part between the two sets of ** **s until you have a total of 8 stitches and then you go on to whatever it tells you to do next.