I have a Question

I seen this icon the other day but I didn't save it so I could ask how it was done, so i'll have to try and explain it.

Anyway, what I want to know is, this icon was coloured and it had a black and white circle on top of the colour (of the same picture) and it had a dashed line around it but it wasn't touching the image, it looked like it had been expanded about 2 pixels away from the actual image. I've tried to add a stroke when I do this but the stroke always ends up on the picture not about 2 pixels away.
Can anyone help?
Sorry if it didn't make sence, let me know and ill try and explain better.

I use PS CS2.