Here's how it's done.
I used a J hook and three colors of yarn. The pink is Vanna's Choice Baby Magenta, the white and black are both Sincerely Acrylic yarn. The cool thing about a granny square is that it can be made in as many colors as you like, still look super cool, and use up LOTS of your yarn stash!
With your first color, ch 5 and join with a sl st.
Round 1 - Ch 2 (this is the first dc), 2 dc in ring, ch 1, 3 dc in ring, ch 1, 3 dc in ring, ch 1, 3 dc in ring. Join with a sl st in top of beginning ch. Weave in ends of first color.
Round 2 - Join in second color with a sl st into any of the ch-1 spaces you've created. Ch 2, 2 dc, ch 2, 3 dc in the same space. Ch 1, then 3 dc, ch 2, 3 dc in the next ch 1 space. Repeat this process 2 more times and join with a sl st in beginning ch. Weave in ends of second color.
Round 3 - Join third color in with a sl st into any ch-2 space. Ch 2, 2 dc, ch 2, 3 dc in the same space. *Ch 1, 3 dc in next ch-1 space, ch 1 (3 dc, ch 2, 3 dc) in next ch-2 space, repeat from * 2 more times. Ch 1, 3 dc in next ch-1 space. Ch 1. Join with a sl st in top of beginning ch. Weave in ends of third color.
Rounds 4-Infinity - (Use whatever color you like. Repeat the pattern, or do something different.) In the corners (which are the ch-2 spaces), join in with a sl st. Ch 2, 2 dc, ch 2, 3 dc. Ch 1. Put 3 dc in each of the ch-1 spaces. Put 2 groups of 3 dc's and 2 ch between them in each of the corners.
Obviously, you can make this whatever size you like, but average baby blanket sizes range anywhere from 18-36 inches. One other thing that's pretty cool about this particular pattern is that you could add on to it FOREVER. This blanket could literally grow with your child. :)