Step 2: Cleaning up the pork butt
If you're smoking/grilling, I think keeping the fat cap on is a great idea. In the oven, however, it can turn into quite a mess. Because you're doing it in the oven, you want the rub you'll be using to make direct contact with the meat for extra flavor, because you won't be benefiting from lovely wood smoke. Smearing your dry rub on a fat cap you'll pull off and discard later is a bad deal. There's also the issue of the fat cap never rendering down enough in the oven to be tasty.
Before you start going to work on the fat caps, clean your sink thoroughly. Then place a baking rack in the bottom and put the butt on that, fat cap side up. Using a sharp knife and/or kitchen shears, start to cut away the fat cap and any silver skin you encounter.
I normally start this by finding the place the fat cap is the least connected and pulling it up. Then use the knife or shears to cut through the connective tissues holding it to the meat.
Don't fret about getting every single piece of fat - you just want to get off all the really thick bits and the silver skin hiding below them.
Flip the butt over and check the other side, too.
As you can see in the last photo, I lost 2-3 pounds in the total weight just in fat. :D
Note: because you are working with such a large piece of meat, you might encounter some nasty stuff. There might be large veins and arteries and extra blood. Cut these away and don't worry too much about it. It's normal! Also, check the bone end for any fragments and remove those.