Pat, just dig the hole a little deeper than you normally would, and cover the pellets with some dirt. I can't tell you how much dirt to put on the pellets, but I just toss some dirt over them. I top dress with the pellets around the daylilies afterwards, but I've also tossed them on the daylilies many times, and I've never lost one due to that. I've never had any burn, or any problems.
