You take a cutoff wheel, and manually score out the thread so it looks like a tap. You leave the following edge (the side that is going to do the cutting) either straight up and down or just slightly undercut, so it cuts nicely. You then heat the bolt up to red heat at a minimum, then quench it (works best with the higher grade bolts), ideally with some oil, lacking that, water works too but can possibly crack the bolt. You then have a redneck tap. Works with pipe thread too, but only to clean out or straighten messed up threads.
The reason you use the higher grade bolt you can find is because of the carbon content. The more carbon, the harder you can get it. By heating it up, you are changing the grain structure of the steel, quenching freezes that grain structure. You are actually forming martensite if you have something with a higher carbon content than mild steel.