Tamera,
The ch 3 at the beginning of rnd 3 counts as your first dc. Yo and your next dc is made by crossing the hook in front of the ch-3 and inserting it into the ch-1 sp immediately to the right of your ch-3. Pull up a loop, yo, and complete the dc as usual. This will look kinda of funny as your chain will seem to fold over onto itself when you insert the hook into the ch-1 space. Not to worry, it will straighten out as you complete your second dc. Be careful not to twist or turn your work and you will find that the completed second dc crosses over the front of the ch-3 (1st dc) you made at the beginning of rnd 3. I imagine that your next (3rd stitch) will have you skipping one ch-1 space to the left of your ch-3 and working a dc in the next ch-1 space, then the 4th stitch will have you crossing your hook in front of the 3rd dc, inserting the hook in the skipped ch-1 space that is to your right, and completing a dc in that skipped ch-1 space. Again, your work will fold down over itself as you insert the hook in the space to the right of the last dc you made, but will straighten out just fine as you complete the dc. Hope this helps!
NanaJ (Judy in Oregon)