Cut a bunch of (approx) 5 inch pieces of Microspun. The exact number that you will need depends on the length of the pony-tail holder that you are covering.
Loop one strand at a time around the hair-tie as shown (we are using a straight piece of yarn for a demonstration; the hair-tie is actually curved!). Pull the free ends through the loop and tighten it.
After the whole hair-tie is covered with yarn, working one strand at a time, put a bead on each strand of yarn, add a dab of glue anywhere on the yarn and slide the bead so that it is seated in the glue.
Repeat until the entire hair-tie is covered in yarn and beads.