After cutting out your circles you are going to thread your needle with it having a double thickness of thread. Tie a knot at the end and you are ready to start! Take a circle and fold down about a half inch of the edge. Start close the the fold of the fabric. Go completely around the outside of the circle using a basting stitch, each should be about half an inch long. I've done a crude picture using my computer's paint application because I could not get the lighting right in order to see my stitches. After reaching the beginning of your stitching on the circle, pull the thread tight and it will cause it to gather and form a cute little button piece of fabric. Make a knot with your thread in order to keep it tight and repeat this process with another circle.
This repeating process can take a very long time. My vest is made of 121 individual yo-yos sewn together. If you are making a vest larger than mine this number will be higher unless you use bigger circles.