Découpage is a loose term that people use to describe the act of affixing things to objects in a decorative manner. A découpage medium is a glue that dries clear, and it generally creates a seal that protects the decoupaged surface. Most découpage mediums work with fabric (read the label), but Mod Podge also makes a medium specifically for use with fabric. The Fabric Mod Podge is specifically for decoupaging fabrics to other fabrics.
Fabrics to Fabrics
Mod Podge Fabric recommends you use it for attaching fabrics to other fabrics. This seems to allow for some movement in the fabric (it is recommended for banners and "wearables"), but it can be used for other applications as well. It is washable, but you have to seal it first. It is washable 72 hours after it's sealed, and then washed in cold water on the gentle cycle, or hand washed in cold water. Other découpage mediums work on fabric, but they will make the fabric stiff.
Fabric to Wood
You can découpage fabric to wood like a dresser, you can make a frame more interesting by adding fabric -- just make sure that you découpage to a clean surface that has been sanded first. Also make sure that you smooth the fabric down after you have laid it down; you might use a screen-printing squeegee to help prevent bubbles from drying into the fabric.
Fabric to Glass
You can découpage fabric to glass (again, so long as the medium is rated for this purpose). This might be a good way to use a shadow box -- you could edge the inside of the glass with a fabric trim. You could trim the top of a glass vase, or you could découpage a whole fabric scene inside a fish bowl. You could even jazz up clear glass plates by decoupaging fabric to the bottom.
Fabric to Everything Else
Découpage medium works with a large variety of items, too many to list. If you have a container you want to use (maybe as a pencil holder), but it has a big logo you don't care for, you could découpage over that with your favourite fabric. If you have a scarred-up piece of furniture made up of particleboard, you could découpage over it and continue to use a battered piece of furniture. If you are not sure whether it will stick, do a test patch first.
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