Set up grid & guides
First we need to set up a grid to assist when digitizing embroidery letters. Guidelines also help when setting reference points. Set up grid spacing in the Options dialog via Setup > Options > Grid & Guides. Turn on Snap to Guides. Set vertical spacing to 10mm and horizontal spacing to 0.50 mm. The narrow horizontal spacing helps to digitize more accurate reference points.
TIP
If you are planning to do more custom font digitizing, it may be worth setting up a template dedicated to the task.