Next, prepare the applique fabric piece for the design. To do this, print the dieline (DL file) that is included in the download.

Print a copy of the dieline file at full size with your embroidery software. (If you do not have embroidery software or you are unable to print from it, you can embroider the dieline file onto a sheet of paper. Load the dieline file ("_DL") into your machine, hoop a piece of paper, and embroider the dieline directly onto the paper.)

After the dieline is printed or stitched, use the "template" to cut the fabric to the right size and shape. 

Begin by making a "sandwich" of stabilizer, applique fabric, and the paper template. Spray a piece of cutaway stabilizer with a little temporary adhesive (I use KK100). Smooth the applique fabric on top of the stabilizer.

Next, spray the backside of the paper template with a quick shot of adhesive and smooth it over the fabric.

Cut out the shape.

Attach the hoop to the machine and load the embroidery design (that's the file that begins with "Y" followed by four numbers).

Move the hoop so that the needle is directly over the center point on the towel. 

Embroider the design. The first thing that will sew is another dieline. After the dieline is finished, stop the machine and remove the hoop, but do not unhoop the towel.

Spray the backside of the fabric piece with adhesive.

Place the fabric piece right inside the dieline.

Attach the hoop back onto the machine and continue with the design. A zigzag tackdown stitch will sew next. This binds the applique piece to the fabric for the remainder of the design.  Then, all the inside elements will sew.

Continue with the design. Next, a satin stitch border will sew.

When the design has finished, unhoop the towel and tear away the topping. If any small bits are left behind you can use a tweezers to remove them or wet your fingertips and gently brush the topping away. Trim away the excess stabilizer on the backside of the embroidery: cut along the bottom edge as close to the stitches as possible without cutting them. Then, cut around the side and top edges leaving about 1/4" to 1/2" of the stabilizer behind.  Also, trim any loose, long stitches on the backside of the embroidery.