Question: How do you do the k2tog?
There are various ways that you can do this, my preferred method and in my head the easiest.
Step 1: Take all the stitches off the loom and transfer them to a piece of scrap yarn.
Step 2: Put the loops back on the pegs as follows: 2 loops per peg, except for in the second decrease, you will have the last peg with only 1 loop.
Now, go ahead and knit the pegs.
Hope this helps.