knit, nit

Knit or knit means the process of connecting yarn or thread by a series of  loops--
Her grandmother used to sit by the fire and knit.
She took a class to learn how to knit.
Knit may also mean the type of fabric made by knitting--
The fabric used to make t-shirts and sweatshirts is a type of knit.
Many knit fabrics will unravel if you pull on a thread.

Nit or nit ( rhymes with knit ) means the egg of an insect, usually meaning the egg of a louse--
He thought he saw a nit in his hair, so he went home and soaked his head.
You'll have to spray the dog for fleas again next week, in case any nits have hatched.

Now that you know that, you can say--
"She used real wool to knit sweaters, but always inspected it to make sure there wasn't one nit in the yarn."

Note--a "nit wit" is a thoughtless or silly person--
"Why am I such a nit wit?"
Note # 2--to "nit pick" means to find tiny or imaginary faults in something--
I think it looks fine. Don't nit pick.
Note # 3--bones that are broken are said to "knit" when they are getting better--
He felt an itch when his broken bone started to knit.
Note # 4--to "knit" one's brow means to make a face with a wrinkled forehead--
His brow was knit in concentration.