I am trying to use stitch #3 (zigzag) to sew around some applique. I have the stitch width set on 5.5, the stitch length on 0.5, and the tension on 2.5 and the pressure foot 2. The problem is that it is forming a tunnel or indentation underneath the stitches. Is that normal or am I doing something wrong? I am trying to make the Sweatshirt Jacket that UnglyCook put in the Tutorials sometime ago.

Sounds like you have the tension to tight or too loose. I am not near my machine to look at the moment.

I don't have a Pfaff, but that is a common problem when doing satin stitching. The usual solution is to place a stabilizer under the fabric. Loosening the bobbin tension helps too.

You may need a stabilizer underneath to help prevent the ridge from forming. I usually use a stitch width of 3 or 2.5 when doing a satin stitch around applique.

check to make sure threading is correct and there is no unnecessary tightness. it helps if you have identical thread above AND in bobbin. also, be extremely careful if you are going to change bobbin tension; this would be the LAST thing i would try. use a SCRAP of SAME fabric to practice on until stitching improves, then sew on your project! hope this helps

What Pfaff do you have? Some have a slightly different way to make the adjustments. I would think that the stitch length of 0.5 might be bit to short for the width of 5.5.
I would play around with different variations on a practice sandwich with a scrap piece for the applique piece to see which worked best to avoid the tunneling and to also check the tensions which worked best.

You need stabilizer.

Mine does this all the time..... tension is tight and the ONLY way I have ever fixed it was to put heavy tear away stabilizer UNDER the project. For some reason even when you loosen the tension to zero it is still to tight, but with the heavy stabilizer it doesn't have a chance to tighten.

Good luck.

I have a Pfaff 2170. Thanks so much for the suggestions. I'll try working with the length and width of the stitch and the tension. I was testing everything with a thinner piece of fabric so I'll change to the actual fabric I'll be using to get a more accurate sample. Thanks to each of you!

Use a good stabilizer (cutaway or a couple layers of solvy). An open-toe foot is also really useful. I use the IDT and see where I'm going.