step one: be me.
i melted crayons down into other crayons recently. this is how i did it:
1. Collection. Get a bunch of crayons. It's best to have too many than too few, otherwise you'll end up combining colors that you weren't planning on combining.
2. a and b. you can sort then peel, or peel then sort. Peel the labels off all your crayons, and put the crayons in piles or small buckets by color. I had tons of black crayons, and yellow, blue, and red crayons left from my wedding. I separated all the colors.
3. Place roughly half a cereal bowl full of crayons in a cereal bowl. A microwavable cereal bowl. You can use any container that you don't mind having coated with melted crayon. Technically, you should use something reserved for crafting. However, being a reformed crayon eater, I can vouch for non-toxic crayons being non-toxic.
4. Microwave at 30 second intervals. Check every 30 seconds, stir a bit, and microwave until smooth and melted. If you want your new crayons oddly textured, you don't have to wait until all the little bits are melted, but it's a good idea. Also, my bowl wasn't labeled microwave safe, and did get quite hot. Use hot pads, and don't do this without adult supervision, or if you are horribly clumsy, or have cats and dogs running around and generally being trip hazards.
5. Once nice and melty, carefully spoon into the molds. What molds? Oh, that's right, I didn't have a supply list at the top. I used the molds that are made for chocolate. You can also use silicone molds, ice cube trays, margarine tubs. Basically, anything that can take the heat is doable. Remember, the larger the crayon, the longer it'll take the infernal thing to cool. Fill the mold to the top especially if you're using fairly shallow boom box molds like I did for the black crayons.
6. Let it cool and solidify about 5 minutes or so. Then stick it in the freezer. This cools 'em down the rest of the way, and because they shrink a bit more than the mold itself does in the cold, it's super easy to pop 'em out of the mold. Twenty minutes in the freezer is more than enough time. While you're waiting, you can get the next batch of crayons melted, if you want, but you might have to remelt them once your molds are free.
And for further info:
melting point of crayons
short tutorials on how to melt crayons and make new crayons
BakeItPretty, a source for superdope chocolate molds, from cameras to scissors to cute lambs
I leave you with the always lovely Billie Holiday.