It’s much easier to manipulate everything using VCarve.
Can I get an answer to one question? Are the notches supposed to be 1/8"?
yes they are
If the notches in the parts are supposed to be 1/8" to match the 1/8" material, the size I’m getting is 80%, so that wouldn’t match the difference between inches and mm.
Use V-Carve to get it setup, generate your g-code and use UGS, or Chilipeppr or PicSender…whatever you prefer. Or just use the easel project shared by @sketch42.
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I use VCarve and UGS almost every day.
Do you want the V-Carve file I put together for the Dinos?
I can get the correct sizing by using a multiplier in VCarve, so I’m good there.
OK, you are doing the same thing I did…enjoy, and please post a picture when you cut it.
Actually, doing it like that means I can adjust the cut to accommodate material that’s 0.121" if necessary. 
The slots should be whatever the thickness of your material is, so I would scale the size of the whole so that the slots are the width of the thickness of your material. But, to answer your question, as per the instructions on the project page, the slots should be 1/8" or rather 3.175mm in the SVG file.
Here is one we did on our Shapeoko 2 with the 6W Air Assisted Laser Diode and 1/8" Birch ply. The DXF was imported into KeyCreator Direct Cad and the gcode was generated with KeyCreator Machinist.
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That looks great. I think the char on the edges actually adds to the look. 
Cheers
Ian
Cuts look fantastic, but is it my focusing problem or half of the Dinosaur up, other half cut on the work piece. Please put this together than we can enjoy the view.
That’s only a optical delusion. 
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You scared me, I thought time to see my Doctor. 
That’s freaky, now you’ve said it, it is all I can see now
Loving the re-makes guys! Keep it up.
I’m literally on the way to get some nicer material to cut one of these for a gift.
Try a tiny one cut out of a CD…I saw a butterfly made from one once.
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