Lord Libidan, a cross-stitch blog, has a wonderful post about using hand-dyed thread. You’ll learn about different types of hand-dyed threads and see examples of Cross Stitch done in hand-dyed threads. Although it might not look like it, these samples are very useful for needlepointers.
Danish method goes down a row making half the stitch, then goes back and crosses the stitches. This can cause different colors to appear in each stitch. in needlepoint this will happen if you take two passes to make a stitch or have layered stitches.
In English method, each stitch is completed before going to the next stitch. This is the usual way we make needlepoint stitches. It’s important to remember that color transitions will look best if the stitch is made in straight lines, either horizontal or vertical.
The block method creates stitches in small groups, changing to another group when the color changes. In needlepoint, this is called clumping.