This is the first step where you will introduce the rules associated with discipline, using some form of an aversive, to motivate the dog to not disobey a command.

At this point in the training we will be using a leash and training collar to teach the dog, with as little discomfort and stress as necessary, how to rid himself of a correction before we teach him how to actually avoid it.  This process is called escape conditioning.

This step is extremely important because if the dog does not know exactly what is expected of him, once he does get corrected, he may panic and display side effects such as aggression, flight, or even learned helplessness.  It is the most forgotten step of amateur and traditional trainers.  DO NOT forget this step!

Escape conditioning is, without a doubt, the most stressful step of any training program for both the dog and the handler because it is only at this step that the dog must purposely be put in a situation to get a "correction" so we can teach the dog what to do when faced with that correction in the future.

The good news is that this step does not have to be traumatic, and can actually go quite smooth if the exercise is well thought out and the communication to the dog is good up to this point.

As long as you keep in mind that this step is about TEACHING your dog about the sit correction, there is much you can do to make this very easy for the dog and make the overall training session a good experience for him.

Therefore, make sure you do this lesson on leash and still reward the dog the same way, with praise, treats, and affection, as you did in Phase 1.  Be sure to use a teacher's calm and reassuring voice just as you did in previous steps.

Depending on what training collar you are using, the exact technique to the correction will vary.  What will be the same is that it is best to wait until the dog is actually in the "sit" command before you teach the dog how to escape a correction that eventually will be applied if the dog disobeys that particular command.  This is because if the dog is already in the position, it will be easier to teach the dog how to get back into that position once corrected.

This is the best way to teach the correction and still keep the dog balanced enough to enjoy the training session overall:

1. Show the dog you have a treat.  Let the dog have a sample if needed to spark interest.
2. Say the dog's name and "sit".
3. If the dog does sit, praise then give a treat.  If the dog does not sit, reconsider if your reward is motivational enough, but do NOT use a correction for disobeying yet.
4. While the dog is still sitting, position your hand palm up (which will be holding the leash) directly over the dog.
5. Move around slightly, but stay close, and wait for the dog to break position.
6. As soon as the dog breaks position apply the correction quickly, gently, and calmly.  For all common training collars this movement will be straight UP over the dog's head with the leash to apply pressure.  If you are using a halter style collar or choke style this movement, and the discomfort it will cause, will be enough.  If using a Starmark collar you will gently "pump" the taught leash by letting the leash rest on the fingers while you open and close your hand.  If using a prong collar you may "pump" or gently flick your wrist repeatedly (depending on which minimal effort he notices better).  No matter what type of collar you use DO NOT use any arm movements to JERK the dog.  The goal is to provide noticeable but minimal discomfort to the dog.  Besides being uncomfortable these movements will also restrain the dog from engaging in any other rewarding activity.  Calmly repeat the command "sit" as you apply the correction to encourage the dog to go back into the position.
7. Since the dog does not have much options for movement and you are repeating the command as you correct, the dog may start to go back into the sit position.  If this happens, withdraw the pressure on the training collar at first effort and PRAISE once the dog is completely back in the sit position.  But, if the dog seemed confused when you applied the correction it is OK to prompt the dog back into sit position by either luring with a treat as you correct, gently touching the rear, or any other way that you think will help the dog move back into sit position.  Just be sure that which ever prompt you use, you do not overshadow the primary correction.  The dog must recognize that there is a correction and the movement back to the sit command makes it go away.
8. After you praised the dog for going back into the sit position it is best to say the dog's name and "free" pretty quick so you get a chance to reward the dog with a treat before the dog breaks position again.  This will help keep the session balanced and still enjoyable to the dog.

Basically, the dog will get a reward for initially going into and being released from command to ensure that he will be motivated enough to willingly repeat the exercise enough times to learn how to escape the correction for breaking command.  You may find it more difficult to coax the dog to break with each repetition, but you only need to stay on this step long enough to feel confident that the dog understands what to do on his own to rid himself of correction once applied.  When the dog seems to calmly and smoothly put himself back into position when corrected you can move to the next step.  In the first part of the video below you can see an example of escape conditioning be taught with a halti collar for the sit command:

In the next video you can see a demo of how to use a prong style collar to teach the correction for sit: