Embroidery Applique With heat-transfer vinyl
Many varieties of iron-on vinyl (the type you use with cutting machines like Cricut) can also be used as applique "fabric."
What's awesome is you don't have to pre-cut the HTV--just tear it off after embroidering the applique's border stitch.
Here's an overview of some of the steps.
1. Stitch Placement Line
2. Place HTV On Top
3. Embroider Tacking Stitch
4. Add Border Stitch