This decorative stitch is a series of twisted chain stitch run over a bunch of straight stitches. The over all visual effect is that of a sheaf or a butterfly. Usually, 3 straight stitches are tied with a twisted chain stitch, giving it a sheaf bundle look.

To do this stitch, you need to know the twisted chain stitch. Remember that you do not go through the fabric or even pluck it while doing the twisted chain stitch as it is done over the foundation of the straight stitches.

For the sake of this lesson, I have laid three different types of foundations. This will give you an idea of the different effects a butterfly chain stitch can make.I will work the straight stitches from left to right, but will work the twisted chain stitch  from bottom to top.

butterfly_chain_stitch_1        Fig 1: To begin, we make a foundation by making a row of straight stitches. For that, we draw the needle from A-B, C-D, E-F and so on.
 Fig 2: For this lesson, I have made three different kinds of straight stitch foundations.
X: sets of three straight stitches spaces evenly between each other.
Y: a series of straight stitches with no spacing. They will be bundled up in sets of three.
Z: sets of closely stitched four straight stitches with different vertical heights.
butterfly_chain_stitch_3   butterfly_chain_stitch_4
 Fig 3: Now we begin to bundle the straight stitches using twisted chain stitch. For that, bring the needle out from the bottom of the last straight stitch.
Take the needle under the first set of straight stitches as shown.
       Fig 4: Now, loop the thread around the needle to form a twisted chain loop. This loop will hold the set of straight stitches in a bundle.
butterfly_chain_stitch_5   butterfly_chain_stitch_6
 Fig 5: Once the needle is pulled and thread is tightened, a bundle will look like this. This has a sheaf look.    Fig 6: Continue with this procedure till all the straight stitches are bundled. To end the twisted chain, anchor up the last loop as shown.
 Fig 7: The completed butterfly stitch will look like this. Observe how each foundation throws out a different visual appearance.