Often, the portal should be to the Join table rather than Profiles or projects, but what you describe should work. Be aware that "tables" in these drop downs are really "table occurrences".
You would need to select either
DLF Projects New C... or DLF Projects new pr...
for the projects layout in Layout Setup... | "Show Records From". (can't see full occurrence names in your screen shot)
And then you'd select DLF Profiles from "Show Related Records From" in Portal Setup...
Oh I see. The layout I'm using must be showin records from the original occurence of the projeccts table. So, I'd need to make a new layout in order to relate the profiles. Thanks
Or redirect the current layout to one of these occurrences.
Or add occurrences of the join and profile tables and link them to this occurrence of projects...