Ok, really amateur question coming up:

Three relations (A, B, C)

I place a foreign key from relation A into relation B. I then place the same key from relation B into relation C.
Is the placement from relation B into relation C creating a relationship between B and C, or A and C?

Perhaps I am missing some very basic theory here?

Thanks for your help in advance.

yes, provided that it is the key of B that you're placing into C, rather than the key of A

Both. It's a ternary (3 way) relationship - a relationship being "an association among things". However, in ER modelling and UML it is often the case that only simple binary relationships are named and represented diagramatically.