lost in instructions

pattern says:
*K1. yfwd. K2.
Sl1. K2tog. psso.
k2.yfwd. Rep from * to last st. K1.

My question is; Do I begin with one knit then bring my yarn forward to knit two more increasing to 5 stitches. Then decrease it by 2 stitches on the second line.(to cancel it out) and then add two more from the third line? -making it bigger?

or do I Increase by one on the first line and knit two? Does the yfwd go with the k1 or the K2?