Crushed peanuts are in many dishes, ranging from noodle salads to desserts. You can sometimes find crushed peanuts for sale but in general, it's both less expensive and tastier to make your own. There is no single method that's best for crushing peanuts; use whatever process you have the tools for and that creates the texture you desire.
No matter the method you choose, crushing peanuts is easier if you freeze them first.
Place peanuts on one half of a long piece of wax paper; fold the other half over the peanuts. Roll a rolling pin back and forth over the peanuts to crush them; apply pressure just until you feel the nuts giving way beneath the pin. You also may use the rolling pin to strike rather than roll over the nuts. Alternatively, use a meat tenderizer or a mallet to crush the peanuts. You also may try crushing peanuts inside a heavy duty sealed plastic bag. Another method is to use a large mortar and pestle to crush peanuts -- or the blade of a large chef's knife or cleaver to chop peanuts into small pieces, much as if you were mincing them.
Most modern food processors have a "grind" setting or its equivalent, utilizing the blade attachment to crush nuts and other foodstuff. Follow the manufacturer's directions. If you do not own a food processor, use a blender to crush nuts. In both cases, the nuts end up more finely ground, even powdery, than if crushed by hand.
Kitchen supply outlets often sell specialized manual nut grinder tools. They're generally inexpensive and usually work via a hand crank. If you plan on frequently crushing peanuts or in volume, this may be a worthy investment.
After crushing the peanuts, place them in a