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Here's my setep for routing a fretboard for abalone inlay.

This pin router is a Shopsmith attachment. I made the special 1/32" diameter pin guide to work with a 1/32" milling cutter.

I made the plastic routing templates specifically for pre-cut Abalone inlay from Stewart-MacDonald. The templates were built "around" the inlay using two layers of styrene plastic.

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Pin Router Setup

Pin Router Setup

Router Pin and Bit

Router Pin and Bit

Pin Router Templates

Pin Router Templates

Attaching Templates to Fretboard

Attaching Templates to Fretboard

Routing the Inlay

Routing the Inlay

Fretboard Ready for Inlay

Fretboard Ready for Inlay

Fret Markers Close-up

Fret Markers Close-up