I have made several rag quilts and I use flannel, denim or homespun cotton. I have only done a small one with three layers of flannel and the "frayed" edges turned out so much "fluffier" than those I have done withonly two layers. I typically cut my squares @ 6 inches, only because that is the width of the ruler that I use so it makes it easier. I did one with denim and fleece and it actually turned out pretty nice as well. The denim frayed but the fleece did not but it still looked pretty to me. Here is how it looked.....

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