diff --git a/sdk_container/src/third_party/coreos-overlay/sys-kernel/README b/sdk_container/src/third_party/coreos-overlay/sys-kernel/README
index f734d7ee23..183a85d432 100644
--- a/sdk_container/src/third_party/coreos-overlay/sys-kernel/README
+++ b/sdk_container/src/third_party/coreos-overlay/sys-kernel/README
@@ -1,11 +1,11 @@
-The kernel is provided in two parts: coreos-sources and coreos-kernel.
+The kernel is provided in three parts: coreos-sources, coreos-modules,
+and coreos-kernel.
 
 coreos-sources is a traditional Gentoo kernel source ebuild, which
-installs to ${ROOT}/usr/src/linux-${PV}. No extra revision or name is
-added since, like the upstream vanilla-sources, we don't ship patches.
+installs to ${ROOT}/usr/src/linux-${PV}-coreos${COREOS_SOURCE_REVISION}.
 
-coreos-kernel uses the installed sources to build a kernel image and all
-modules. The kernel config is searched for in the files directory based
+coreos-modules uses the installed sources to build the kernel modules.
+The kernel config is searched for in the files directory based
 on the ebuild version and revision. For example version 3.12.4-r2:
  - amd64_defconfig-3.12.4-r2
  - amd64_defconfig-3.12.4
@@ -19,7 +19,10 @@ for using the same rules - for example:
  - commonconfig-3.12
  - commonconfig
 
-Currently our dracut based initrd (bootengine) gets built directly into
+coreos-kernel uses the installed sources and coreos-modules to build the
+kernel image and initramfs.
+
+Currently our dracut based initramfs (bootengine) gets built directly into
 the kernel image, including all kernel modules. (go go modular kernels!)
 This reason for this screwy scheme never came to pass and should be
 fixed eventually. The current grub bootloader already includes logic for
@@ -27,5 +30,5 @@ initrds but the old configure_bootloaders and coreos-postinst scripts
 need to be updated in order to support existing installs.
 
 The coreos-firmware package is a magic version of the upstream
-linux-firmware ebuild which scans the modules installed by coreos-kernel
+linux-firmware ebuild which scans the modules installed by coreos-modules
 and only installs files modules declare as required.