I wrote a post on this a while ago but thought it might make more sense to some in video format. Plus this video shows how to carve the serifs on letters. (To be honest, I had nothing better to do today than play with my camcorder.)
The video has been sped up so you won't fall asleep, since I am the world's slowest letter carver. The music is "Closer to You" by Brandi Carlile.
Now that I know how to speed things up in iMovie, I'm tempted to create a "2-Minute Dovetail" video....