How do you edit a Friends List? Can't seem to find out how to edit the list

Screencast: I created a Friends list a while back and it shows up under filters on the main stream left sidebar. At first I couldn't understand why I couldn't get the pencil edit icon to show on this Filter and then I realized it is a Friends List.

Question is? How do I edit the friends list? It is not clear on how to edit the friends list at all.

Screencast: http://screencast.com/t/9qDDLQQt