Do you really want to put it in a quilt or would you like to be able to see it and have it out.It could be used as batting in a quilt or cut away the bad part get some wool in a contrasting color and use the good part for the center and the other to go around it.If there is enough of it you could have a small quilt or lap robe. I have my fathers army blanket. It is cream colored and still in pretty good shape.He never used it after he got out of the hospital.I've never thought of putting it in anything because it is the old wool and they don't wash that well.