Using Project Geometry to Create Parts Inside of an Assembly

Project edges, vertices, work features, loops, and curves from existing sketches onto the current sketch plane. You can use the projected geometry in the current sketch as a profile or path, or to constrain or dimension sketch curves or points.

In an assembly, project edges of a component cut by an assembly section view, if the uncut part intersects the sketch plane. The projected edges are not associative and does not update when the parent geometry is moved or resized.

The size and position of projected geometry is fixed relative to the originating sketch (reference geometry). You can constrain sketch geometry to the projected geometry. The projected geometry moves or changes when its parent sketch moves or changes. Sketch geometry that is constrained to the projected geometry also moves.

You can automatically project reference geometry onto the sketch plane by selecting options from the Sketch tab in Application Options.

Autoproject edges during curve creation
Automatic reference edges for new sketch

Check out my video of how to do this.
Submitted by Dave of the INCAT CAD Geeks