Hanging Dish Towel

Cut a piece of fabric 10" by 13" (this does not need to be exact).

Cut a dish towel in half.

Fold it length wise with right sides facing together.
Using a straight stitch, sew with a 1/2" seam, one short end and then the long raw edge,
leaving the remaining short end open.

Turn it right side out and tuck one corner up into the opposite corner.

You will have a triangle pocket.
Be sure that your long seam is facing up as shown above.
When you are completely finished,
you will want this seam to be folded on the inside.

With the open (raw edge), short end, turn it up inside the sleeve about an inch.

Press it.

Using a basting stitch (by hand or machine),
gather your towel's raw edge to the width that
would just fit inside your sleeve, knot it off.

Tuck the raw, gathered edge into the opening of the sleeve and stitch.
It would be good to use a denim needle for this,
because with all these gathers it is hard on the needle.
Be careful not to force it and break the needle (like I did).

I also had to lift my presser foot some.
Make a button hole just below the triangle pocket
(which is pointing upward).

(Yes, this button hole looks AWFUL!)

Stitch a straight seam on the 2 sides of the triangle pocket.

Sew your button just below where the towel meets the sleeve.

VOILA!

I tried a few different sizes of sleeves, until I found one that I liked.
I also tried tri-folding the towel (the green one to the right),
rather than gathering it, that worked nicely too.