You were almost there....
Since the ECM knows where TDC is on the #1 cylinder and where the crank is in it's rotation when it detects the RPM drop it not hard for the ECM to figure out which cylinder is under compression.

I guess if H-D was in to acronyms like the metric bikes they could have sticked it V.S.I.P.C. for variable speed ignition position concept.

 

Wow. And the OP asked about a little smoke on startup.....

 

I noticed a white puff of smoke that hovered above the engine. Not sure exactly where it came out from.

 

Thanks for those who've responded. I wish I understood half of what was argued about....lol

I'm just going to assume no damage done, and keep riding. I'll leave the motor mechanics to professionals.

 

The smoke escaped through the breather due to the cylinder being fired while the intake valve was open. This does no damage to the engine.

I'm sorry that this post ended up taking the turn that it did but I felt that you deserved to have your question answered correctly and not with something silly like "you didn't hold the starter button long enough."

Now that is sound advice, my friend.

 

Just a thought. Same thing happened on my bike right after i got it. The puff of white smoke came from my battery terminal/cable. It was real loose and had just came back from the stealers 1000 mile check up.

 

Well, there ya have it fellas... Case Closed!

 

I doubt it, but ya never know : )