It's called Chimize thread. I have used it my bobbin and top thread, both plain and decorative stitches, and even done sashiko embroidery with it for quiltsquares. Then you iron it (I use a very thin press cloth to protect my iron from things that melt and stick) and it shrimks up to 30% depending on weight of fabric.
I works best with thinner fabric like lawn. Would be fun for doing childrens' clothes. I'm not sure is that useful for quilting.