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This is a little trick I remember reading a long time ago, but I just now decided to give it a try! It's the right time of year since it works so well with Christmas lights.
(There are a lot of better tutorials out there for this, but I haven't looked at any of them to make this post, because I'll just compare and worry too much about my own instructions. Feel free to Google for more thorough and accurate information.)
Here's how I did it:
1. Cut out a shape. I happened to have a decorative punch (for scrapbooking) in the shape of a butterfly. Any shape will do--I've seen examples with hearts and stars, for instance. I'm interested in experimenting with some hand-cut creations. Cut the circle large enough to fit over your lens. I traced around my cap for sizing. It doesn't have to be perfect (or even circular), I just tried to make it semi-neat for the photo.
2. Attach it in front of your lens. I just used tape, knowing I'd be removing it after a few minutes.
3. Take a picture of some Christmas lights! The important thing is that the lights are as blurry as possible. Basically, what you're creating is shapely bokeh. You can either manually take the lights out of focus, or you can force the camera to focus on something at a different distance and hold down the shutter so it won't refocus on the lights.
Some places sell little plastic lens caps that have shapes pre-cut for this purpose. This is just the cheap, DIY version of those.
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In the above photos I focused on my little hummingbird decoration and a butterfly Christmas ornament so you can see that the lights are just strung up in the background and blurred (into the shape of butterflies). The more lights the better, and it still works in a brighter image, it just doesn't have the same vibrancy. Experiment with it, because I certainly haven't done much experimenting and I am sure there are lots of cool things you can do with this. Also, I don't know how well it works with non-SLR cameras. Anyone want to try and get back to me?