Roast peanuts (if raw) on a slow flame till the skins crack. Do not let the skins burn. Place them in the grinder up to a height of 1 inch. Grind until it turns to butter. If it is not evenly crushed, stir and grind again.
Variations
You can use different nuts and seeds to make your own butters using the same method. Sunflower seeds, cashews, almonds, macadamia nuts etc. All do not need roasting–e.g. cashew butter is good un-roasted. You can also mix different seed butters.