3x3 Step 2

In this step, we're going to insert all of the middle-layer edges except for the one that goes directly above the "empty" corner from Step 1b. We will use the empty corner to make it easier to put the edges into their correct positions.

First, hold your cube so that the empty corner is in the DFR position. Next, while holding the D-layer, turn the top two layers of the cube so that the spot (the hole) where one of the middle edges should go is above the empty corner. (For example, if you want to put the FL edge in place, turn the top two layers 90º counter-clockwise.) Now, look for the the correct edge piece in the U layer. If the correct edge piece is in the U layer, do one of the following two sequences:

If the color of the edge piece on the U layer matches the color of the center of the F face, position the edge piece so that it is over the center of the F face and perform R U' R' .
If the color of the edge piece on the U layer matches the color of the center of the R face, position the edge piece so that it is over the center of the R face and perform F' U F .

If the correct edge piece is not in the U layer, either pick a different hole that matches an edge piece that is in the U layer (this is the easiest choice), or find the appropriate edge piece and turn the top two layers so that the edge piece is positioned above the DFR corner and perform R U' R' . This moves the correct edge piece into the U layer. Then, you turn the top two layers so that the hole for the edge piece is over the DFR corner and proceed with one of the two sequences from above.

Proceed with this process until all of the middle layer edges have been placed correctly except for the one above the empty corner. At the end of this step, your cube should look something like this (depending on which corner was your empty corner):

Examples:
So, in this example the empty corner is already in the DFR position. We turn the top two layers counter-clockwise to put the hole where the GO edge belongs over the empty corner. Now, we notice that the GO edge is in the U layer and it has orange on the U face. So, we position the edge over the orange center (of the R face) and perform F' U F . This inserts the GO edge between the green and orange center pieces. Now, simple turn the top two layers so that the centers are back in their original positions.
For this example, the only edge that still needs to be properly placed is the edge that goes between the blue and red centers. So we move that hole over the empty corner by turning the top two layers. When we look for the correct edge piece in the U layer, we see that it is not there. Now, we turn the top two layers so that the correct edge piece is over the empty corner and perform R U' R' . This puts the RB edge in the U layer, so we turn the top two layers so that the correct spot is over the empty corner. The color of the RB edge on the U face (blue) matches the F (blue) center, so we turn the U layer so that the edge piece is above the F center and perform R U' R' . Then, all we have to do is turn the top two layers back to their correct positions and we're done with this step.