This is how I do it.
1. Cut my shape out of Freezer Paper.
2. Iron the shiny side onto the back of my fabric.
3. Cut out the shape 1/4" bigger than the Freezer Paper.
4. Either use Elmer's glue or liquid starch on the seam allowance & fold it over the Freezer Paper.
5. Press it down with a hot iron.
6. Take the paper off & repress.
7. Use the glue to position the applique onto the backing fabric & heat set it with the iron.
8. Sew it down.