You should start a 2nd Grader in First Language Lessons, Level One. Work through that level this year, then skip to Level Three for 3rd Grade.
Levels One and Two used to be combined in the same book. We separated them for consistency and ease of use with our writing curriculum, Writing with Ease. So, Level Two assumes the student has completed Level One. Level Three assumes the student has had no previous grammar instruction and thoroughly reviews everything found in Levels One and Two (at a third grade pace) before introducing sentence diagramming.