Peter Hayes' PhD is pretty much my favourite olive dry fly. I came across it in FF&FT in 2005; Peter was running a series revealing the flies he had developed. The mix of muskrat underfur over yellow thread and paraloop hackle splitting a V wing is superb.
Start off by running a layer of thread to the end of the hook shank; I am using yellow Gudebrod 10/0. At the bend form a small ball of thread. I use wax to stop the thread slipping off itself. Tie a bunch of microfibbets on top of the ball (around 7-8), bed the thread down as much as you dare, this will help to splay the fibbets. Tie the ends of the fibbets down on top of the shank to a point about halfway to two thirds, the butts will form the post to wrap the hackle around. Tie in a length of yellow Pearsalls silk where the fibbets are tied down.
Wrap the silk back towards the tail.
Now dub the body with muskrat underfur, making a nice taper. the dubbing should be thin enough to allow the silk to show through near the tail.
Tie in a clump of silver mallard flank, leave a gap about a hook eyes width. The wing will be split into a V by the paraloop hackle so you can begin parting it in two half's.
Tie in the hackle - I have used medium grey dun - and dub the thorax; again muskrat is used.
Wrap the hackle up the microfibbet butts to a length that meets the eye, wrap the hackle back down a couple of turns.
Tie down the fibbet butts with firm tight wraps. Pull the butts as hard as you can, this will trap the hackle without needing to tie it in. Fold back the butts and wrap a head, this will prevent them being pulled out inadvertently. Whip finish.
A darker hackle and dyed mallard gives this PhD an overall darker appearance.