I know it's late for a new holiday craft but you can just file this away for next year.
Instructions for making a yo-yo tree
Cut a length of 1/4" diameter dowel to a length of 8 1/4". At the top of the dowel, cut a slit 1/2" long through the diameter. Paint the dowel.
Paint a 2" tall spool. If the hole in the spool is smaller than the dowel, drill it out a bit to make room for the dowel. Insert the dowel into the spool until you see the bottom end of the dowel at the bottom of the spool.
Wrap thread around the spool until it appears well-wrapped. Secure the end of the thread using glue stick.
To make the yo-yos:
Out of different fabrics cut 1 each:
8 1/8" diameter circle
7 1/4" diameter circle
6 3/4" diameter circle
6 1/8" diameter circle
5 3/4" diameter circle
5 1/8" diameter circle
4 1/4" diameter circle
3 1/2" diameter circle
3" diameter circle
And cut 2 of:
2 3/4" diameter circle
Cut a small slit in the center of each of the circles.
Make yo-yos out of each of the circles. Do you know how to make a yo yo? It's so easy. Using a knotted thread, stitch the circumference of the circle, 1/4" from the edge of the circle. When you complete the circle, pull the thread gently to gather the circle into itself. Whip a couple of stitches to hold the yo yo in place.
Slide each yo-yo onto the dowel through the slit and the gathered end you just made, starting with the largest circle and working your way to the smallest.
For the tippy top yo-yo, you do something a little different to make the yo-yo more finished looking. Before you stitch the circumference of the circle, turn the edge over all the way around the circle and press. Now stitch the folded-over edge just as you did with all the other yo-yos.
After you slide the last yo-yo on, top your tree with a purchased rusty-tin star. If you prefer you can use a chipboard or other sort of star. You may need to adjust the width and depth of the slit cut at the top of the dowel accordingly.
Send me pictures if you end up making a yo-yo forest. I'd love to see them in pastel colors or snowy whites.