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The lower inside edge should just touch the bottom of the rim edge.

1. Go to your preferences and change your super nudge to (nudge should be at 0.01 inch) to 30x. With the Node edit tool select all 8 outside nodes of the yellow tire and super (Shift) nudge them down once.
2. Select the outside (major axis nodes and the lower 3 nodes and super nudge them down once.
3. Select the lower 3 nodes only and super nudge them down 2 more times. You may want to manually adjust the lower node handles at the major axis by dragging them down slightly.

1. Now we need to add some treads to the tire. Create a rectangle 0.2 inches wide by 0.3 high with 25 rounded corners. Convert to curves and fill with black. Align it with the yellow tire horizontally centered and vertically on the bottom of the yellow tube. Now nudge the black curve down ten times at 0.01.
2. Dupe this black curve and nudge it up 0.35 inches (1 Super Nudge and 5 nudges)
3. Dupe twice more, DRAW should move the dupes for you if it doesn’t move them the same as in B.
4. Transform the height (Use the Property Bar) as follows: Top rectangle = 0.36 inch, Next rectangle = 0.34 inch, Next rectangle = 0.32 inch. Nudge the top rectangles three 2 times, the top two rectangles 2 times and the top one 2 times.