A flat-felled seam is created when sewing two lines of stitching at the seam while at the same time, enclosing the raw edges of the fabric. This seam finish prevents unraveling and fraying. It also makes the seam very strong giving the finished garment a nice clean finish on the inside. Sewing a flat felled seam is easier than you might think.
The video below demonstrates a step by step tutorial on how to sew a flat felled seam:
Carol of Rosey Corner Creations also shares an excellent photo tutorial on how to sew flat fell seams.