I think it's a method for doing turned edge hand applique. You hand baste the applique fabric to the background following the outline of your shape and trim the fabric around the basting stitches. You snip a couple of basting stitches, turn under the edge, applique, and continue around like that. I found this tutorial which seems fairly detailed:
http://sentimentalstitches.net/instr...hand-applique/
Also the following websites might be helpful:
http://blog.shopmartingale.com/quilt...-step-by-step/
http://appleblossomquilts.danemcoweb...s/backbasting/