Wow what a challenge. This is right up my alley though. I've actually done something similar. I think my total cost was more though because I used stainless pins with screws bought at a knife supplier, as well as other things that added cost.
First you'll need to go to a craft store. Buy two things there. One 3/32" brass rod, and one 1/8" brass rod. Here in Oklahoma we have Hobby Lobby. They sell it there. You can get these for less than $5, probably less than $4 actually.
Next: On your way home from the craft store, stop by Wal-Mart, Lowes or Sears. Pick up some thin kerf cut off discs and some 1/2" sanding drums in medium and fine. You can probably get it all in one kit for 10 bucks or so but make sure the mandrel is in there too if you don't have one.
Next, go by your local lumber store and ask to see the available hard woods they have. Most carry Wal-Nut or Oak, and some may even have somthing exotic like Pecan or Maple. Pick up just enough to make your scale. If you ask them, many times they have a cut off pile of scraps and they will let you look through it. If you are lucky you can pick up a small amount for next to nothing here.
Next you want to pick you a fixed blade that you like. Get somthing like a cheap high carbon Russel Green River works knife for around $6 plus or minus from one of the knife supplers. One like this works exceptionally well. I have made folders using these blades for many years.
http://www.heimerdingercutlery.com/catalog/moreinfo.cfm?Product_ID=2094
Next you want to pick you up just enough titanium to make a knife. Something in .050 thickness will be fine.
Once you have all these things you will want to visit the link in my profile for my homepage. Read up on "how to turn a fixed blade into a folder" and some of the other threads there by STR. I recently turned a Bob Dozier fixed blade into a folder this same way.
http://www.knifeforums.com/forums/showtopic.php?tid/776102/
You can do it all with a variable speed dremmel with patience and some work using the cut off discs to do all the cutting for the blade, the sizing of you brass pins for the body and the pivot, a grinder or sander to shape the blade, and a saw of some kind to cut your slabs which can even be done by hand if need be. Just clamp the block in a vice and cut off what you need from the end sticking out.
STR
