"Exactly after step two where is your third step going. In which direction"
My third step is moving down LOD.
During this time, my body is backing DW.
My foot will be slowly developing from backing DW to backing LOD.
What you need to realize is that there are at least three seperate paramaters here:
1) direction of movement
2) foot alignment
3) body alignment
If you don't start paying attention to the differences (and the fact that the book only gives you the first two in detail) you will suffer a lot of confusion.
Also, you need to realize that the direction of movement is described not in room directions, but usually in relation to the official foot alignment. You really should translate that to room directions and maintain it, even if you choose to alter the foot alignment. A step that might be sideways with one alignment would be backwards with another - but what is important is that it still goes in the correct direction in the room.