I believe there is an error in that pattern. When you slip a stitch, it is impossible to PSSO because there is no stitch to slip the stitch over since it is the last stitch on the needle. Are you sure you have typed this correctly for us?

Thank you so much for trying to help me, I wish I could find someone to give me lessons! You're right I did type it in wrong! This is a copy of the pattern. It was free on Ravelry ao I hope it's OK to post it.
Is it the 3rd yarn back that I pass over?

Christmas Lace
Size: 76 inches long, 5 inches wide.
Materials:
size 6 knitting needles
2 skeins Inca Alpaca 109 yards/50 grams each
tapestry needle for weaving in ends
Gauge: gauge is not critical as you will block to desired size
Cast on 22 stitches.
Row 1: k3, *YO, sl1, k1, psso, k2; repeat from * to last 3 stitches, YO, sl1, k1, psso, k1
Row 2: p3, *YO, p2tog, p2; repeat from * to last 3 stitches, YO, p2tog, p1
Repeat these two rows until desired length ending with a row 2. Knit 1 row. Bind off and weave in ends. Soak in tepid water for 30
minutes. Lace blocking wires threaded through the outermost row of yarnovers on either side give a lovely even scarf. If you do
not own blocking wires try threading a colorfast thread or string through the yarnovers instead.
Copyright 2007 by Julia Sprague
stingdragon@gmail.com

No. It would be the second. You take the stitch you slipped and pass it over the one you just knitted. Does that make sense?

-Babka

It is the slipped stitch that you pass over not the yarn over. It is the stitch immediately behind the K1 that you pass over the K1

dowlinggram and babka both told you the same thing, but in different words, and I concur. Put the tip of your left needle (assuming you knit right-handed) into the slipped stitch and pass it over the last stitch you knitted and off the needle.

Thank you so much everyone. I finally got it and it looks right. After you told me it was the second stich it made sense.