Hold your thumb and forefinger 1 to 3 inches apart, depending on the size tuft you want to create (ours uses a loop about 2 inches long), and encircle thumb and fingertip with embroidery thread at least 10 times (ours contains 13 loops).
Twist loops at center to create a figure eight.
Fold at twist.
Near the folded end, wrap another piece of embroidery thread around the loops, and tie.
Tighten thread, make a knot, and snip off excess. Sew to a pillow or other item as desired.
For such small objects, buttons can make a big impact -- especially if you look beyond the expected colored plastic ones. Martha often uses these embroidery-thread "buttons" (No. 2 in image), which are actually tufts of embroidery thread, in her home.