ARLINGTON - Charlotte Dudney is breathing new life into punch needle embroidery and is making a big name in the needle arts industry.

Not only has the Arlington resident found a niche market for a craft she enjoys, she has created an entirely new market for independent needlework shop owners nationwide.

In early February, she will be a featured artist at the International Needlearts Retailers Guild national market in Nashville, Tenn. Like other trade markets, the show sets the tone for retailers for the coming year.

In July, Dudney taught the craft at a smaller market in Charlotte, N.C., and "people were out of their minds" about the craft and her patterns, says Kris Stott, owner of Schaum-burg, Ill.-based Norden Crafts.

Norden Crafts, one of the largest distributors of products to independent needle craft retailers nationwide, recently began exclusively distributing Dudney's patterns.

"It's really because of her this will spread," Stott says. "We have not seen anything like this in years. It was literally the talk of the show, and word is spreading."

The craft dates back to 17th-century Russia, where it was used to embellish clothing and other items. A needle punches the fabric, leaving raised loops of thread on the other side to create a design.

Dudney, who for many years did cross-stitching, quilting, basket weaving and primitive rug-hooking, which also uses a punch technique, was introduced to punch needle work a few years ago while attending a workshop with her stitch group.

Dudney says she fell in love with the process and the finished product. The technique, she thought, resembled primitive rug-hooking in miniature. So she started experimenting with it, drawing patterns and perfecting the punch method.

Dudney started giving away patterns and teaching others. Before long, her stitch group, which has met for nine years, and her family encouraged her to go into business.

"I was teaching people just by word of mouth, sometimes two and three classes a month," Dudney says. "My stitch group, they encouraged me more than I can even tell you."

Several months of research on the Internet and a huge dose of help from Kathy Morrissey at the Stitch Niche in Arlington set Dudney on her way.

"When I got on the Internet, there were few people selling patterns. That's one of the reasons why I decided to go ahead and do this," Dudney says. "There's not a lot out there, and it's different from trying to get into the cross-stitch market, where there's hundreds and hundreds of designers."

She put a few finished designs in the Stitch Niche, and they attracted the attention of local needleworkers. But when Stott saw Morrissey displaying Dudney's projects and patterns at the Nashville market show last February, it turned the tide.

"I took one look at it and thought, 'This is gorgeous stuff,' " Stott says. "It was too good to pass up."

Morrissey, who has owned the Stitch Niche since 1997 and has been involved in needlework since childhood, says she thought after seeing Dudney's work that Dudney needed to start a business.

"It's something different," she says. "It came at a time when shop owners needed a shot in the arm. Charlotte has so much integrity. She has literally and truly taken the country by storm."

To get started, Dudney got a tax identification number, updated her computer and programming capabilities, bought a copier and found places to buy the materials to assemble her kits wholesale and large-scale.

"The next thing I knew, things were going really well," Dudney says. "It just started snowballing."

By July, after a marketing test with the Old Mill Stitchery shop in Liberty, Mo., Norden Crafts ordered more than 1,000 patterns and began supporting her with products and distributing her patterns.

At a show in Charlotte in July, she taught the technique to several shop owners and designers, including Frank Bielec, a designer on Trading Spaces on the TLC Network. Bielec and his wife, Judy, design cross-stitch patterns under the company name Mosey 'n Me.

The classes were so popular that Dudney called home and asked her family to send more materials overnight.

One of the hardest tasks for Dudney while growing her company has been finding time to continue designing, which involves several steps, from rough drawings to a prototype. Dudney says she'll then punch the pattern three or four times to make sure the colors are just right and the directions well-written.

In the early months, Dudney says, she sometimes wanted to quit. A few shop owners in other states turned down her request to carry her line, and she did not think she was expanding her product beyond her local base.

But since that July trade market, business has been brisk. She spends many weekends traveling to shops to teach the craft. She's booked for most of the first six months of this year.

"This has been the hardest thing I have done in my entire life," Dudney says. "Every day that I wake up I'm at work now. I will wake up at 4:30 a.m. and I keep paper by my bed, and I have just enough light coming in the window so I can sketch designs."

Companies now call her and ask if she'll use their thread or test their frames. The inquiries have supplied Dudney with new ideas and ways to employ punch needle craft.

It's also created some competition it the past few months, with some cross-stitch designers now creating punch-needle designs. But Stott says Dudney's designs keep her ahead of the pack.

"Her designs have made her successful," Stott says. "It has endless possibilities. It's fun and has quick results."

Dudney says she hasn't even come close to reaching a pinnacle.

"Bottom line is, I absolutely love this," she says. "I love it more than any of the other things I've tried, and let me tell you, I've tried everything. I wake up every morning and think about what I can do."