Most sweaters, hats etc. have a ribbed edge, which stops the knitted piece from curling up. It is also stretchy. If you don't want a stretchy hem or sleeve cuff there is an alternative. It is called the "picot" edge. Here is how to achieve it.
I have cast on 21 stitches for the example in red and 30 stitches for the example in blue, but you would need to cast on the number of stitches given in whatever pattern you may be using.
For the red piece I used 5 mm needles and for the blue 3 mm.
Step 1: Knit Five Rows
Knit 5 rows in stockinette stitch. (i.e. one row plain and one row purl, ending with a plain row) These rows will be the rows that "turn under".
Step 2: The Picot Edge Row
Knit the picot edge row as follows. With wrong side of work facing you,
knit 1, (yarn round needle, knit two together) to end. You will see that you have knitted a series of "holes" but still have the same amount of stitches on the needle as you started with.
Step 3: Continue Knitting
The next row after the picot row is always a knitted row.
Now your can knit your sleeve,sweater or hat in the normal way. Remember the picot edge can be used to replace the ribbed edge to keep the work flat. I have knitted about 8 rows in stockinette stitch to show the effect on the red example and a few more rows than that with the blue.
Step 4: Turn the Picot Edge Under to Form the Flat Hem Line
With right side of work facing, turn the picot edge under and sew neatly into place. You will see that you have a nice lacy looking edge which will stay flat.
Step 5: The Finished Hem
As you can see the picot hem is quite different to a ribbed hem, in the fact that it is perfectly flat without any of the stretchiness. This kind of edge is better when you are making a smart jacket where you want the bottom hem to be absolutely flat and not curl up. Also having the extra few stitches that turn under add weight to keep the edge in place.
It is also ideal when knitting dolls clothes, especially a doll's skirt which you want to stay flat at the bottom and not curl up (and look pretty too!)