Here I am about to cut the slot for the bass E string - I have put my nut slot gauge on the string over the 1st fret and set the dial to zero. This gauge is going to measure the distance between the bottom of the string & the top of the fret:
With the gauge set at zero I press down the string on both sides of the fret - the dial moves backwards and gives me a reading of the gap - here its showing around 0.07" (1.78mm) - I like the gap to be around 0.03" (0.76mm) for the wound strings and 0.02 (0.5mm) for the plain strings. Too high and the guitar will not be comfortable to play and you will get intonation issues - too low and the strings will buzz. So, after taking this reading I can see that I need to cut this slot 0.04" (approx 1mm) deeper.
Here is the nut with the string slots cut and excess nut material removed. I believe that for best tone and sustain you want the most string pressure on the front edge of the nut. To make this happen the slots are cut to gently fall away on the back of the nut. This can take lots of practise as too much and the string will buzz like a sitar, too little and you don't get the maximum tone from the string (and it may not slide too smoothly). If the guitar has a shallow peg head angle I leave a bit more material on the unwound strings to stop them popping out when bending strings. Each slot is fine polished, the the entire nut is polished. At this point I do not glue in the nut as I will need to remove it on the next step.
I am now going to work on the frets - to start I set the relief in the neck to as close to zero as possible by adjusting the truss rod.
Here the guitar has been put into my neck jig - note the dial indicator has been set to zero with the strings tuned to pitch.
Here the strings have been removed - notice how the neck has moved as indicated on the dial. Strings can exert a huge pressure - around 200lbs.
The neck jig is now set to exert the exact same pressure onto the neck as when the strings were on it - see how the dial has moved back to the original zero point. Now the neck is under simulated tension, recheck the relief is zero and I am ready to mill the frets.
Taped off the fingerboard with low tack masking tape, protected the body & the sides of the neck (note that the neck jig has 2 dials taking 2 readings from the neck)
A quick test of the frets using a fret rocker - if it rocks then the middle fret is high etc.
Here is an 18" fretboard sanding beam that has the same radius as the neck (12")
After sanding the frets to an acceptable level you can see how the tops of some are now flat:
Using a diamond coated fret file sized for the frets I re-crown each fret. The pro-cut lube is great stuff - it makes for a faster, cleaner job.
800 grit sanding stick to take out the file marks - the stick is notched to the same crown as the frets
Using a small file to dress the fret ends - this makes for a nice comfortable neck.
Here I am polishing the frets with some micromesh 3200 grit - micromesh was developed for removing scratches from fighter jet windshields to maintain their optical clarity. (Thanks to Tim - guitar and equipment tech for Lemmy & Phil in Motorhead for the micromesh)