I haven't specifically worked with Stahls stitch files, but I have done something similar with other applique stitch files. We open the stitch file in our digitizing software, save it with a different name and delete everything but the guideline (placement) stitch. Our digitizing sofware then permits us to export it to a vector format such as EPS. We then import it into Corel Draw and create a new vector outline of the letter (or number) and clean it up a little. It takes a few minutes per letter, but we do it for each and then have a whole alphabet. We can save that as a font in Draw and simply type in what we want in the future. We use that as our cut file (we use a laser so we cut directly from Corel Draw, but I assume the vinyl cutters can handle vector cuts too).