Upcycled T-Shirt Owl Coffee Mug Cozy

The supplies for the project:
This cozy is going to be made from a jersey dress with brown, orange, and red flowers on it.  There will also be an owl applique made from brown felt and stiched with orange embroidery thread.  The cozy will attach with at button made form a coconut shell.
Making the dress into T-Shirt Yarn:

This first step is to turn the dress into yarn.  This is done by cutting the fabric into strips but leaving an uncut portion at the top.
The dress is all cut and made into yarn:

After the fabric is cut and made into one long strip, it is then pulled so that the fabric rolls inward to form a tube.  Above is the completed ball that is all ready to be knitted.
The knitting is over halfway done:

Here the cozy is almost done being knitted.
The completed project:

The cozy is all done and can know be purchased on my etsy site here: http://www.etsy.com/listing/95600297/on-sale-owl-coffee-mug-cozy-made-with for $5.49 + S&H.