Knowledge is created. This happens in the heads of people. Knowledge is captured. It is put on paper in a report, entered into a computer system of some kind or simply remembered. Knowledge is classified and modified.
Modification can add context, background or other things that make it easier to reuse later.
The test of this step's success is to determine how easily people in the organization will be able to find and use the knowledge when they need it. Knowledge is shared. When knowledge is shared and used, it's modified by the folks who use it. This takes us back to knowledge creation. There are three types of repositories of knowledge.