From WoodworkersZone WoodWiki
Dados and Grooves
Dados and Grooves are the channels cut into a board. Dados are channels crosscut across the stock and grooves are channels cut with the grain (a 'rip' cut). For simplicity's sake, the rest of this article will use the word "dado" to mean either a dado or a groove. If it makes a difference, we'll note it.
Dado's are one form of joinery. A typical use is found in cabinet construction: consider a bookcase where dados are cut into the bookcase sides and the shelves slide into these channels.
Cutting a Dado
There a several ways to cut a dado. Two of the more common are with a stacked dado blade or with a router.
The goal is to get the width of the channel cut the thickness of the joined stock. A good dado is accomplished with a snug fit and no visible gaps showing. A great way to accomplish this is with a jig made for your router.
One easy jig is made with two pieces of scrap hardboard. The first piece or hardboard is cut to a length greater than the shelf width. The width of the hardboard is greater that the diameter of your router's base plate. The second piece of hardboard is the cut to the same length as the first, but to a width of about 1".
Glue the two pieces together as shown:
Grab the bit that you'll use to make the dado and chuck it into the router. (It's usually of a diameter less than the width of the dado.)
Run the router along the hardboard guide rail and trim off the excess hardboard on the bottom as shown:
You now have a jig where the edge of the bottom hardboard represents the exact cutline of that bit/router/base combination.
Now do it again - to make a second jig.
Clamp one guide to the workpiece. Place the edge of the hardboard guide at one edge of the
dado line. Using a piece of shelf stock as a spacer, slide the other guide up snug against the spacer and clamp it into place.
Now remove the spacer and route out the dado.
The router jigs can get quite fancy, here's one excellent example done by Mark Ackerman. Mark's Router Dado Jig