This section is from the book "The Boy Mechanic Vol. 2 1000 Things for Boys to Do", by Popular Mechanics Co.. Also available from Amazon: The Boy Mechanic, Vol2: 1000 Things for Boys to Do.
A rather pleasing, yet puzzling, deception is to pass a dollar bill into the interior of an examined lemon or apple. This can be accomplished in several ways, either mechanically or purely by sleight of hand. The mechanical method, of course, is the easier and really just as effective. In performing, a plate with three apples is first exhibited, and the audience is given choice of any one for use in the experiment. The selected one is tossed out for examination and then returned to the performer, who places it in full view of the spectators while he makes the dollar bill vanish. Taking the knife he cuts the apple into two pieces, requesting the audience to select one of them. Squeezing this piece he extracts the dollar bill therefrom. The entire secret is in the unsuspected article - the table knife.
The knife is prepared by boring out the wooden handle to make it hollow. Enough space must be made to hold a dollar bill. The knife lies on the plate with the fruit, the open end facing the performer. After the bill has been made to vanish and the examined apple returned to the entertainer, he takes it and cuts it in half. One of the halves is chosen, the performer impaling it on the end of the knife blade and holding it out to view. While still holding the knife he turns the blade downward and grasps the half apple and crushes it with a slight pass toward the knife-handle end where the bill is grasped along with the apple, which makes a perfect illusion of taking the bill out of the apple.
As to the disappearance of the dollar bill, there are many ways in which this may be accomplished. Perhaps the method requiring the least practice is to place the bill in the trousers pocket, and then show the audience that the latter is empty. This can be done by rolling the bill to small compass, and pushing it into the extreme upper corner of the pocket where it will remain undetected while the pocket is pulled out for inspection. Other combinations can be arranged with the use of the knife, which is simple to make and very inexpensive.