as far as i know, you cut squares on the grain line.
layer with your backing fabric and a piece of batting cut 1" smaller in length and with. (make a sandwich with the three pieces centered, so 1/2 inch all the way around is just your denim and backing). sew around each square, using a 1/2 inch seam.
sew the squares together, jeans side out, with a 1/2 inch seam. sew into rows first, then sew the rows together.
clip the seams every 1/2 inch.
wash several times until they fray. (note: househould dryers can't handle the lint volume without becoming a fire hazard. so either use a commercial laundry, or clean your lint trap in your home dryer very frequently.)
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