Yes, you are going to need a dollar bill to do this! Of course it isn't essential, you could use a piece of paper of similar dimensions - but it'll be more fun with a dollar bill - let's face it, you have a serious malfunction during the folding process and it's gonna cost you $1..! I like the incentive...heh heh.
Ok, so you have your dollar bill, if you're not using a dollar bill, you can go here for instructions on how to make a couple of dollar sized bills from a 6" square sheet of paper.
From here on in, you are on your own. I will only give you diagrams for each stage. See how well you can follow the diagrams to finish up with the finished article.
The first pic of the item correctly folded wins 10 Swiss Guards, but even if you're not going for the loot, try this out as a bit of fun...