In the step 2 you must use your thumb and index alternating between them.
The index always play the fourth string open, while the thumb sound the same note of the step 1.
Attention: Once you press a button does not immediately raise your finger but keep it pressed until you need to change fret.
In this fingerstyle guitar exercise, control the position of the hand: the thumb should not proceed to other fingers, but must remain outside of the hand. See here for the position of the hand.