In the second chapter 'This Teetering Bulb of Dread and Dream' Hofstadter refines what it means to think about thinking.
What do we need to consider when we reflect on thinking?
We need to consider how the brain works, from amino acids and neurotransmitters, to synapses and neurons, all the way up to the visual cortex and right and left hemispheres. He calls this 'mentalics'; the 'small-scale phenomena that neurologists traditionally study: how neurotransmitters cross synapses, how cells are wired together, how cell assemblies reverberate in synchrony, and so forth (34).
What else do we need to consider when we reflect on thinking?
We need to consider webs of relationships between concepts: the concept 'dog', the associative link between the concepts 'dog' and 'bark' , the organization of memory, grammar, memes, the 'ego' etc. He calls this 'thinkodynamics': "thinkodynamics is analogous to thermodynamics; it involves large-scale structures and patterns in the brain, and makes no reference to microscopic events such as neural firings" (34).
Our thoughts and experiences of the world and our lives can be describes in the language of 'thinkodynamics.' This is because "The pressures of daily life require us, force us, to talk about events at the level on which we directly perceive them." (35)
Our sense of intentionality and free-will occurs at the level of 'thinkodynamics.' Hofstadter does not feel that a description at the level of complex 'mentalics'--which would at best be difficult--would be satisfactory as it would not correspond to our perception of events and our experiences.