I've been wanting to making these for several years now. I love mini pinatas. I made these for a few friends kiddos. Unfortunately, I have no idea where the 'beginning' pictures are, but below you can see I took a regular old dollar store party hat and cut a 'fringe' about 1/2 the way up all the way around.
I then used glue and covered the whole hat with black fringed crepe paper. I bought a bunch of little toys and blinking jewelry from Party City and filled the inside.
I then just took a black round circle and glued the 'fringed' part to the circle to hold it in place. The idea is that the kiddos get to rip these bad boys open to get to a few Halloween goodies. So simple, and really cheap. One roll of crepe paper (50 cents) covered 8 party hats and then some.