
For the bag itself I used a pattern you can find here. It's a really basic pattern, good to start with if you're just learning how to knit on double-pointed needles (dpns).
I made some slight modifications: I used larger needles and two strands of Loops & Threads Pizzazz Purple Multi held together. That idea I got from a neckwarmer/headband I knitted for my sister-in-law this Christmas, which also had a strand of Pink Multi in it, breaking up the self-striping even more. Because I was using larger yarn and needles I only cast on 46 stitches instead of 60. I also only knit the bag to 7 inches instead of 8.
The needles were 5.0mm/US no. 8 double-pointed needles (dpns) and the yardage / weight of the yarn is: Super fine weight, 1.76 oz/50 g / 218 yd/200 m ball. Translated for non-knitters, those are the sizes and numbers you want to see on the package/label.
I'm not sure how much yarn it required, because I was using up bits and pieces from the gift I mentioned earlier and there were several tiny balls and a couple of hollowed-out skeins. Good project to use up yarn from your stash on, though! Plus, it's basic garter stitch, though the nature of knitting in the round makes it look like stockinette, so once you've got it down you can just knit, knit, knit and keep your hands busy while you watch a movie or marathon a show. (I can't stand not having anything to do with my hands.)
Here's what it looks like sitting up, closed, with dice in it. If the bottom looks a little bumpy, especially on the corners, it's because I did the bind-off, where I grafted the two sides of the bottom opening together, wrong. It's called Kitchener stitch or Kitchener grafting and I messed it up by putting the tapestry needle over the knitting needles as I was making the stitches instead of under them. The bumps should be on the inside and the outside should look continuous.
In this case the outside is bumpy and the inside is perfect. I didn't notice I'd made the mistake until the very end and I didn't want to undo all the work. Who looks at the bottom of a dice bag anyway?
The drawstrings are just two lengths of yarn threaded loosely through the top of the bag and then tied together at the ends to prevent fraying. You could also decorate the ends with tassels, bows, beads, anything you like! ^_^