Capo or Barre chords?

I have a song I want to try, and it says "capo 1".
I don't have a capo, and I read that you can get around a capo by using a barre chord. I don't get it? For example, if the first chord is F, and it says to play the song using "capo 1", what do I do.
My guess is that I have to lay finger #1 across the first fret, sort of simulating a capo with my finger, but then, what would the fingering be to make the correct sound for the F chord, since I am using up a finger across fret #1?

You would make an E major shape relative to the "capo" or barring finger.
So, E major on open strings would be first fret on G, second frets on D and
A. With the barring finger on the first fret, fret the second fret on G, and the third frets on D and A. That is F Major. With the notes on the strings from low E to high E: F C F A C F. The triad that makes up F Major are F A C, so it all checks...

Please correct me if I goofed.

That's the idea. There may be an easier way to think of it:

Finger an E chord. Looks like this:

e-----0---------
B----0-------
G-----1-------
D-----2-------
A-----2-------
E------0-----

Normally one would use the first, second, and third fingers for this.
However, to make this into an F chord, you would use your second, third, and fourth fingers. Second finger on the G string, third finger on the A string, and the fourth finger on the D string.

Use your first finger to act like a capo by laying it across the strings behind the chord. For this example, you slide the whole shape up one fret, and lay the first finger down behind the chord, which raises the open strings along with the chord shape. This is a barre chord, which can be moved all over the neck. The same chord on the 5th fret would be A. 3rd fret: G. 8th fret: C. If you learn the names of the notes on the 6th string, you can name all of the new chords you just learned by applying the root name, which is on the 6th string, to the chord name.

You can do the same thing with the other open chords: C, A, G, & D. Some of them are a bit easier than the others. There are some easier ways to do the
C and G chords, for example, after making them into barre chords. That's for another post. If you're really interested in this, the book Fretboard Logic outlines this whole technique rather clearly and really organizes the fretboard for you.