Step 1: Rough-Cut Your Circle
Step 2: Rough Sand Your Circle
Step 3: Get Your Final Dimension
Your circle won't be exact. Measure your it to find out in which direction the smallest dimension is. With the smallest dimension perpendicular to the sand paper, cautiously,using small increments, sand the circle down until you create a flat spot on one side. Keep sanding and measuring until the distance across the flat spot to the opposite side of the circle matches your desired diameter. Be sure you don't over-do it and go beyond your final dimension. I've marked the flat spot on the disk I made to make it easier to see. The peg poking out of my circle is off-center and matches the hole in the handle this cap is being made for. It has nothing to do with this Instructable.
Now set up your tooling. Any scrap you have lying around will do. Lay a straight edge on your sander's stage, parallel with the sand paper. Now, place your circle on the stage between the straight edge and the sand paper with the flat spot against the sandpaper. Move the stop forward until it stops, pinching the circle in the middle. Clamp your scrap stop to the stage.
Next, take another piece of scrap and place it to the side of the circle (I'm left handed, so mine is on the left... If you're right handed, don't complain, just reverse it. Us left handers have had to figure out reverse directions our entire lives:). Clamp it in place and start the belt sander.
Use the small piece of scrap to keep the circle in place horizontally on the belt. This will insure the same section of belt is sanding on your circle. Rotate the circle, keeping slight sideways pressure against the small piece of scrap and backward pressure against the stop until you're able to rotate the circle freely with no grabbing.
Stop the belt sander and measure your piece. I like to sand in smaller increments and sneak up on my dimension as opposed to throwing caution to the wind and grinding it all off at once. Using .010, .015, .020, .040 & .050 shims placed between the stop and the circle, I can work down to the dimension I want without adjusting the clamps.