There are many variations when it comes to making a dirt hole set. I will attempt to walk you through how I make one and hopefully some of the information will be helpful to you. I've watched several videos, read books, talked with trappers and watched trappers make dirt hole sets. The basic method is the same, the goal is to learn how to make a good dirt hole set that works for you and catches predators.
The equipment that I use is as follows. I use a Trappers Tote so everything I need to construct and complete a dirt hole set is with me in one bag. I carry a standard D-Grip trowel, a Super Stake driver, Sod Buster Hammer, pro-metal sifter, kneeling pad, underalls, wool, bait, lure and urine. I've had the most success using Hiawatha Valley Predator Bait, Minnesota Brand Predator Bait Plus, Violator-7, Minnesota Red and Minnesota Brand red fox and bobcat urine. The traps I use are the MB-550 2 coil and the MB-450 regular and offset jaw. I use the MB Chain system to stake my traps. I have two pairs of leather gloves, one pair for handling my traps and equipment and one pair for handling bait, lure and urine. Clean equipment is a necessity. I just wax my traps with odorless wax when starting with new ones. After the first year I dye them with logwood dye and then wax with odorless wax.
Using a kneeling pad for scent control, I dig a hole 3 to 4 inches in diameter approximately 8 to 10 inches deep at a 45 degree angle with a trowel. I put the dirt from the hole in my sifter for covering the trap later. For coyotes I want the jaw of the trap approximately 6 inches from the edge of the dirt hole. For fox and bobcat I want my trap approximately 4 inches from the edge of the hole. With a Sod Buster hammer I scrape out the trap bed approximately 1" larger than my trap, I place the sod behind the dirt hole for backing. I dig the trap bed approximately 4 inches deep; I want the trap bed to be lower than the lip of the dirt hole.
With my driver I hammer the super stake end into the lower side of the trap bed. In normal dirt you can drive the chain stake in about 12 inches, the rest of the chain stake will bed easily under your trap. I pull up on the chain to turn the stake end horizontal for good holding power. Push the trap firmly into the trap bed and pack sifted dirt all around the jaws and springs. I put the dog of the trap at about one-o-clock toward the dirt hole; this gives me a better chance of having the animal step in the pan area first and not directly on top of the dog and jaw. Having the trap firmly bedded is one of the most important steps to a good dirt hole set. It will be less likely to tip or spring if the animal steps on the outer area of the trap bed.
I use an underall under the pan to keep dirt from settling under it. You can also use a pan cover over the trap and sift 1/4" to 1/2" of dirt over the entire trap and trap bed area. Be careful to make sure there are no small rocks or other debris that could get stuck in the trap jaws when the trap springs. I want my pan to be the lowest spot in the trap bed so while I'm sifting dirt over the trap I lightly brush away dirt from the pan area making the bed look like a bowl. The reason for this is I want the animal to step directly on the pan; normally they will step over dirt into a low area. In cases where you have to bring in your own dirt to complete a set, I use that first while I'm sifting and layering the trap bed. I then use dirt from the area to blend in the set, to make it look as natural as possible. The more you can make your set look like an animal has been actually digging the more effective it will be.
Once I have the trap covered I switch gloves and apply my bait, lure and urine. I put the Hiawatha Valley Predator bait down into the bottom of the hole. You can use a spoon, but I like to use a stick to get the bait all the way to the bottom of the hole. I use about the size of a quarter for the bait portion. I put a small clump of sheep wool in the hole for a visual effect and the smell of the wool is an attractant too. For backing behind the hole I use the sod or clumps of dirt from digging the trap bed and form it around the back of the dirt hole. You can try variations of backing by using natural backing from the surroundings such as a piece of wood or a rock, even a t-bone or vertebrae from a cow's backbone will work and give you a good visual backing. I apply the lure, normally Violator-7 on the upper lip of the hole or on the backing, usually about the size of a bean works well and then I put a splash of urine on the backing. It is important not to get any odors on the trap or bedding material which would cause the canine to dig and scratch at the trap resulting in a sprung and empty trap. Once my set is complete I stand up, gather up my equipment and scratch out any foot prints or imprints from my kneeling pad to make the set look natural. I look over the set to make sure I haven't left anything behind and I'm on my way to make another set.