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Now, you're gonna use that 'fold line', and fold the jeans towards the wrong side (inside) and pin down. I used a quarter-inch seam allowance to sew the casing down.

 

Make sure the casing is as clear and empty as possible. While you can't see it, I trimmed the fabric around the applique, to make sure it didn't get sewn inside and clutter up the casing.

Done