You have finished with the little cup that cradles the back of the heel. Now it is time to pick up stitches along the edges of the heel flap and rejoin to start, once again, knitting in the round.
Finish the heel flap having just worked a knit row. Now you are going to make a 90-degree turn and pick up stitches along the edge of the heel flap, working from the heel stitches toward the instep stitches, currently being held on that strand of yarn. Pick up a new stitch for every V along the edge; you should have 9 or 10. For an illustration, go here and scroll down to the heading "Pick up stitches for gusset." Follow that post for the rest of the heel turn, referring to the first number in each set for stitch counts. When you are back to 36 stitches on your needles, knit round and round until you can count 36 rows from the yarn you inserted to hold the instep stitches.
And then -- the toe!