In the video, a person is seen using a stencil to cut out a design on a piece of paper. The stencil is placed on the paper, and the person uses a tool to trace around the design. After tracing, the person uses a punch to cut out the design. The person then uses a stylus to add details to the cutout. The video shows the process of creating a paper cutout with a stencil, punch, and stylus.