Sorry it took me so long to get this up here. My wife had a baby followed by an appendectomy, followed by a series of unexpected bills and time off work. Not quite the month we had planned. I forgot I had promised to post this until I got the notification of michigan0626's post. Anyway....
I get my leather and some of my hardware like rivets and belt clips from Tandy Leather Factory. They have a huge selection and good prices. Some other places may be a little cheaper on some items but Tandy is cheaper overall. I like 8-9 ounce leather, but a little thicker or thinner is fine. 8-9 ounce is about 1/8 of an inch thick.
When I started out I ordered from KnifeKits.com. The hardware they sell is overpriced and the leather is low quality stuff. But if you want to buy enough to make one or two holsters, it's probably the way to go because they'll sell smaller quantities than Tandy will. I still get my Kydex from KnifeKits. They sell it in 12x12 or 12x24 inch sheets in thicknesses from .060 to .125 and a ton of different colors including a few digital camo patterns and a carbon fiber print.
You'll probably want a pair of gloves. You'll be able to handle the hot Kydex briefly, but prolonged contact gets pretty painful without them. I use leather, but you can use anything that puts a barrier between your skin and the heat.
You need something heat the Kydex. I usually use a toaster oven but I have to use the big oven when I have a piece of Kydex that won't fit in my toaster oven.
A drill of some sort is pretty much essential for making holes in the Kydex. It doesn't matter what kind it is. I use my old worn out cordless drill that is too beat up to work for anything else. You'll need a couple different sizes of small drill bits, too. The exact sizes will depend on what kind of fasteners you end up using.
I use a utility knife for cutting the Kydex and leather. You can use an X-acto knife or pretty much any other sharp knife. The leather dulls the blade pretty fast and a sharp blade is important for clean, safe cuts so I keep a whet stone close by to sharpen my blades. I make a couple passes over the stone in between cuts to keep the edge razor sharp. If you don't want to bother sharpening the blades, or can't get them sharp enough, just keep a replacement pack close by.
For cutting anything other than a straight line in the Kydex, you'll want a pair of tin snips or a band saw. Some people use a Dremel, which works, but it isn't very efficient. I started out with snips but now I use a small bench top band saw.
For measuring I use a small tape measure but you can use a ruler or anything else you want. For that matter, you don't have to measure. I just prefer to work with uniform pieces and I think it helps me reduce my waste.
If you want to cut straight lines in the Kydex, use a straight edge to cut along. A metal ruler from a carpenter's square works great.
A silver metallic Sharpie works very well for marking the Kydex, but you can use whatever you want. If I have silver left on the finished product, I color over it with a black Sharpie.
I use a good ball point pen to mark the leather, but you can use a pencil or marker if you prefer. Try a couple different things and find which you like best.
I keep a stack of scrap paper close by to make templates when I start a new project. It's a lot cheaper than Kydex and leather so if I mess up at first it's no big deal.
I keep leather scraps to make forms out of. I have different width templates that I use to make belt clips for different size belts, cardboard for shims, and wooden forms for rough forming the Kydex. If you're going to be making many duplicates of anything, forms and templates really speed up the process.
For setting rivets I use a rubber mallet and a rivet setter I bought on eBay. Not critical tools, but handy. I use a leather punch to make holes in the leather but a drill works fine as well. For stamping I bought an alphabet set of stamps from Tandy.
To shape the Kydex you'll want some sort of foam. Most Kydex suppliers also sell foam but it's pretty expensive. I've never used it so I can't say if it's worth the money or not. KifeKits.com occasionally sells bundles of foam scraps pretty cheap if you want to try it. I use a camp pad that I bought from Walmart for $6. It's about 1/2 inch thick blue foam. Just cut it into squares and layer it. Over time the heat will damage it but it's so cheap you can just replace it when it gets too bad. I'm still on my first camp pad.
A heat gun comes in handy for detail work but it isn't critical. Harbor Freight sells one for $8 but the shipping drives the price way up. Lowe's has a Wagner model in stock for about $25. It's a better gun than what Harbor Freight sells and ends up only costing a couple dollars more.
For a more professional look you'll want to clean up the cut edges. A Dremel is handy for that, but sanding by hand works fine too.
I think that pretty much covers the tools. Now we'll get into the fun stuff.
A couple of safety rules before we go any further. You'll be working with a lot of heat. Make sure your gun is unloaded and that all ammunition is a safe distance away. If you plan to make a magazine holster, make yourself a dummy round. With a pair of pliers or Vise-Grips, pull the bullet out of the shell and dump the powder. Load the empty shell in your gun and fire the primer (point it in a safe direction). Press the bullet back in the empty shell. That's your dummy round. Empty your magazine and load just your dummy round before you put hot Kydex anywhere near it.
Now that we're working safely, we can get started.
By now you should have some idea of what kind of holster you want to make. If not, look around at other holsters for ideas. Copy somebody else's design or make up something new.
Crossbreed and most other holster makes use .060 Kydex because it's thin and easy to work with. That feels flimsy to me so I use .080. It's a little tougher for form and doesn't look quite as detailed but I feel more comfortable with the strength. These are real guns we put in our holsters, not $20 airsoft guns, so why take the chance?
Use a piece of paper to figure out how big of a piece of Kydex you'll need. Cut your Kydex a little bigger than you think you'll need. For straight lines, score it with a utility knife and bend it back and forth until it snaps.
Heat the Kydex in the toaster oven or oven at somewhere between 250-400 degrees. Ovens all heat differently so experiment until you figure out what you need. You want the Kydex to be floppy and soft. If it starts to turn shiny, it's too hot. When it gets too hot it warps and is useless. Get it as hot as you can without it turning shiny. Keep a close eye on it.
While your Kydex is heating, get your gun and foam ready. As soon as you remove the Kydex from the heat, place it over the gun as close as you can get it to the position you want. It doesn't have to be perfect; that's why you cut it a little oversize. Set the foam on top and press down. You can press with your hands or put a board on top and sit or stand on the board. Some people build presses or use clamps but I find it's just as easy to sit on it.
Wait a couple minutes then check your progress. You should be able to see some of the details of the gun formed in the Kydex. Experiment with different thicknesses of foam to find what you like. Three layers usually works best for me.
You'll notice that the outline of the gun isn't formed very well. I use a scrap of plywood with the outline cut in it to press over the gun before I press with the foam. That forms the outline in one simple step.
Check that your sights won't catch or snag anywhere. If they do, tape a piece of pencil or something similar behind the front sight. Reheat the Kydex and start over. The pencil will form a groove for the sights.
If you aren't happy with the result, put the Kydex back in the oven and try it again. You can reheat it as many times as you need to. Each time it's heated it will go back to a flat sheet.
Once you get the general shape, heat a small section at a time with the heat gun and form the finer details. This helps with retention and cuts down on rattle, but most importantly, it looks cool
Again, be careful not to overheat.
Once you have the Kydex formed how you want it, mark the shape you want and cut it out with snips or a band saw. Leave enough around the edges that you can rivet it to the leather. Trim a little at a time until you get it where you want it. Mark and drill holes for your rivets then clean off any burrs and sand the edges.
Use a piece of paper as a template to figure out the size and shape of your leather. Set the gun and Kydex shell on the paper allong with your belt clips to figure out where you want them. Mark the paper and cut it out in the general shape you want, again being sure to make it a little big. Trace the paper onto the leather and cut it out carefully. Take your time with it. Leather is expensive so you don't want to make a careless mistake here.
Line up your clips and Kydex shell where you want them on the leather and mark the holes. Drill or punch the holes in the leather and put everything together. Rivet the shell to the leather and mount the clips with Chicago screws or T-nuts and machine screws with finish washers.
Test the holster and trim off any excess leather. Make sure you don't have metal in contact with your skin. Polymer against skin isn't bothersome for most people, but you may prefer to keep any part of the gun from being in contact with your skin.
I like to cut a small bevel on the back side of the leather to clean up the edges a bit. It's just a personal preference thing.
Stamping the leather is fairly simple. Get a wet rag and dampen the leather where you plan to stamp it. Let it sit for a few minutes and dampen it again if you need to. Line up your stamp and whack it with a mallet. Use a hammer if you have to, but beware damaging your stamp set. If you have to restamp it, be sure you line your stamp up perfectly. You may find that the water has discolored the leather. If so, just wipe down the entire piece with a wet rag.
Check your retention. If it's too tight, find where the Kydex fits the tightest and heat the area slightly to loosen it. If it's loose, heat around the trigger guard and press lightly to tighten it up. Experiment with it until you get it right.
That's pretty much all there is to it.
A couple other thoughts for the road: If you sweat a lot, consider using horse leather. It has a dense, non-porous grain and is more durable than cowhide.
When designing a holster or choosing a style, consider when and where you'll be using the holster. Do you need absolute concealment? Comfort in the car? Lightning speed? Will you need to be able to tuck your shirt in? Are you going to be crawling around under a car or bungee jumping wearing the holster?
Edit: Make sure your work area is spotlessly clean. Hot Kydex will pick up little pieces of grit and debris that will later scratch the finish of your gun. Check your Kydex after forming it for any little pieces of dirt.