Wrap a texture or pattern around an object

This is the tutorial we watched to do this effect.

Instructions:

1. Select two images - one an object, and a background to blend it with.
2. Seperate the object from its background so it is transparent behind.
3. Move the object onto the background and place it where you would like it using free transform.
4. Create a Displacement MAP by firstly hiding the background and making the object black and white. (Image > Adjustments > Desaturate)
5. Then adjust the contrast by doing Image > Adjustments > Levels.
6. Adjust the radius between 5 and 10 pixels by selecting Filter > Blur > Gaussian Blur.
7. Save as MAP.
8. Step backward until the object is back to how it was in step 4, in black and white. (Edit > Step backward)
9. Make a copy of the background image. Move the layer above the hand and turn it on.
10. Select Filter > Distort > Displace. Change the horizontal and vertical scale to 25. If the effect is too strong, lower the numbers and if the effect is too weak, raise the numbers. Click ok and load the displacement map that you saved in step 7.
11. Hold the Control (or Command button on mac) and click on object layer.
12. Turn on copy of background layer and then click on it. Create layer mask by clicking the icon at bottom.
13. Change the blend mode and experiment with which one you prefer.
14. Lower the opacity between 70 and 80%.
15. Select the background image and not the layer mask. Select Filter > Blur > Gaussian Blur then lower the radius between 2 and 4 pixels.
16. Click on object layer, Image > Adjustments > Levels. Adjust the contrast to how you would like it.
17. Select original background layer. Create a new empty layer below the object but above the original background layer. Select the foreground colour as white. Select Edit > Fill > Select foreground colour and click ok.