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To attach the elastic, place the elastic face down over the right side of the fabric, so that the edges are aligned. Using an overlock stitch, sew over the elastic tape. The tape needs to be a little shorter then the actual fabric, so that it gathers the fabric. The elastic tape needs to be stretched during sewing. The tape will loosen a little with sewing and will not have the power to gather as when not sewn, so keep in mind it loosens, cut it a little shorter, just a little, then what you actually need.

The stitch should be close to the scalloped edge, but not step over it.

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Burdastyle

http://burdastyle.com//techniques/finish-edges-with-simple-scalloped-elastic-tape/technique_steps/1