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Step 5.
This is the 2nd part of this Photoshop tutorial. You should now have 3 layers inside of the layer set, with the striped background outside of it. Link the the layers and then merge them into a single layer, or just merge the layer set.
a)   b)
 
Step 6.
Fill a new layer above the text with black. Make a selection using the text and then delete the selected area of the black layer. WE're doing this so that we'll be able to move the striped background, which will be visible through hole sin the text, but not in the area surrounding it.
a)   b)
Step 7.
For the moment, make the black layer invisible, Create a small rounded rectangle over the text, with a radius of 5 pixels. Duplicate the rectangle, lining them up like in image b).
a)   b)
Step 8.
Merge them together and duplicate the layer. Rotate the duplicate by 90 degrees and use the transform tool (edit > transform > scale) to scale it vertically (image b).
a)   b)
Step 9.
Use the rectangular marquee tool to delete the rectangles that lie outside of the text. Make a duplicate of the layer and move it to the remaining part of the letter.
a)   b)

Step 10 .

Delete the far right rectangle and then go to [Part 3] of this Photoshop tutorial.
 
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