Sorry i have no step by step pictures but its very simple to do!
Cut the hem off the top you would like to add this efect to so its just a raw edge all around the bottom.
2
Cut 2ich lines going upwards leaving small gaps between.
Start to unpick the flaps making them really frayed. Make small holes with your picker/pin and pull at them. Keep streaching and pulling and ripping until its as distressed as you like it.