As the cloud contracted, it rotated faster and faster, just like an ice skater that spins faster as she pulls in her arms. The momentum of the rotation flattened the originally round cloud into a disk, somewhat the way a ball of pizza dough can be made flat by spinning it in the air. As it flattened, gaseous material condensed, then collected together to form more solid material. Eventually, the cloud grew hotter and denser in the center, with a disk of gas and dust surrounding it such that it was hot in the center but cool at the edges.
The little particles of condensed, solid material were warm, soft and sticky, and whenever they touched each other, further clumped together to form larger balls of solid material somewhat the way pieces of "silly putty" would stick together if they came into contact. The hot and dense part in the center we call a proto-sun, meaning that it was a forming sun. The large balls of clumpy stuff, which could be boulder sized to asteriod sized, we call "planetismals", meaning that they were miniature planets. Eventually only a few large clumps of this material remained in the forming solar system, and they became the core of "proto-planets".