7. Place the circle off-center on the 12 ½ inch square. The closest the circle comes to the edge should be 2 inches. Pin the circle to the square and using a STRAIGHT stitch sew as closely to the edge of the circle as your machine foot will allow (1/8th inch or less from edge). The top thread may match either the background or the circle fabric.
All seam allowances should be cut as a full, or even a generous, ¼ inch.
8. Turn the block to the wrong side, separate the fabric layers and beginning near the edge inside the sewn circle cut away the bottom fabric (the12 ½ inch square) leaving a full ¼ inch seam allowance.
The fabric you remove will become the smaller applique circle.
9. Carefully tear away the stabilizer (if using wash away stabilizer leave this step until block is finished.) Manipulating the seam allowance while removing the stabilizer will create some fraying, which is why a generous seam allowance was used. When the stabilizer is removed a quick spritz with water or Best Press© before ironing will flatten things out nicely.
10. Repeat steps 1 to 9 using the smaller template, the smaller piece of stabilizer and the fabric cut away from the 12 ½ inch square.