Step 1: Pick out and wash your fabric
2 Yards Flannel
Roughly 80" of 1/4" wide braided elastic
Head to your favorite fabric store and purchase flannel in 2 yard increments. The fleece should be as close to 45" wide as possible. Flannel is generally a couple inches shorter because of how it is made. I purchased 4 types because I wanted to make 4 sheets. Also purchase 1/4" braided elastic. I bought 8 yards. If you can you want to get as close to 80 inches per sheet...since I'm being frugal I just cut 8 yards into 4, but if you're buying by the inch, get 80 inches for each sheet you want to make.
Try to hit a sale, fleece can be 5 or 6 dollars a yard but I got this particular fleece for $2.50 on sale. Since A crib sheet is about $15-$20 for a cute design, you want to try to keep your costs down to make it worth your effort...that is if you're trying to save $. If you're just trying to make cool sheets that go with your particular decor, go wild :)
Wash and dry the flannel. This is VERY important. You don't want to go through all this effort and have your sheet shrink after you make it!