Thank you. So do you mean in step 1 of manual 3 step (appendix E) of web note 15, I should include the covariate in the 'usevar' command. Then use the saved data for step 3 (appendix E) to estimate the distal outcome model? In appendix E, which of the variables is the distal outcome? Thank you.
The one-step approach is appropriate at any entropy level. If the class formation doesn't change, there is not really an issue in choosing between 1- or 3-step. I don't think there are citations for this.