Carry Flag
CY is reset as explained above. ( in chapter 1 we have sen in the 2 complement methods of subtraction that the carry is set when the result is positive. Here it is same in step 3 but since in step 4 microprocessor complement the carry flag it is reset.
In gendered we can say that after subtraction if the results is positive carry flag is reset. And if the results is negative carry flag is set.