Please note: photo shows 8 rows of 2 x 2 rib, before the stitch pattern, which is NOT included in the lace stitch pattern below.

Slip next st, as if to knit, to right needle; knit next 2 sts together; pass slipped st over - 2 sts decreased.

Lace Pattern (multiple of 8 sts + 1 st) 
Row 1 (wrong side):
Row 2: K1, *yo, k2, sk2p, k2, yo, k1; rep from * across to end of row. 
Rep Rows 1 and 2 for Lace Pattern.

ABBREVIATIONS / REFERENCES Click for explanation and illustration

beg = beginning k= knit
k2tog = knit 2 together p = purl
rep = repeat st(s) = stitch(es)
yo = yarn over