Abstract: A method of producing an plush transfer applique is disclosed. The method employs and improved diminished bleed or lower density applique border allowing for a reduction or elimination of an impression line at the periphery of the transferred applique caused by the heat transfer process. The diminished bleed applique border is created by arranging a pattern at the edge or periphery of the transferred applique instead of an abrupt line of continuous density fiber, so that the resulting gradual reduction in fiber density causes the fibers to lie flat during the heat transfer process.