Submodels and callouts?

[Jake Hansen]

However, I still cannot figure out how to add the submodel to the model and incorporate it in with a step.

I think your model file is not right. You will need to create a submodel in the file (with the editor, not LPub). You can add steps to the submodel too, just like it would be a normal model.
Then, use that submodel like it was a part and place it in your model. When LPub reaches this line to process, it will create a new page with the first step of the submodel (probably with a light yellowish background). Right-click on a blank part of the page and choose "Convert to callout".
That should do it.

If you want help setting up the file, post your LDraw file (mpd) here.

Thank you for your reply! I have saved it in .mpd with a model and a submodel, but I don't know how to add the submodel to the model. How does that work? Thanks!