I couldnt find this information on the web but this worked.
1. Connect PMSDR to IF out on K3, USB and sound card
2. Download Virtual Serial Port Emulator (32bit is free) from here
3. Connect the K3 to a hardware serial port eg COM1
4. Start VSPE and create a SPLITTER com1 to vCOM3
5. Connect ALL software (win-test, PMSDR extIO) to vCOM3 (not COM1) ie configure COM3 in win-test as radio 1 (4800N81). This is IMPORTANT!
6. Start HDSDR with PMSDR dll in its directory and enable CAT on PMSDR extIO with COM3 4800N81 but also allow REMOTE send CAT commands
7. That's it! Move the dial and the HDSDR frequency changes. Click on the panadapter and the frequency of the K3 changes. Type 28000 in win-test and both HDSDR and K3 change! Magic