Reference Diskette Startup PS/2 Model 80

I've been trying to boot my Model 80 to the reference diskette to
resolve a 165 error. I turn the machine on with the disk in the drive,
it does a RAM check, I get the 165 error, and it beeps twice. What do I
do at this point? do I press F1 twice, to the point where it asks me to
insert a boot disk and press F1 to continue? This always justs gets me
into IBM BASIC. Is there something I'm missing?

.

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