9B studios with a video sharing the steps involved with cutting slits and folding paper in Modo 501 using Displacement and stencil effects. 9B are also providing the asset so that you can check it out for your own damn self. Check out the post and asset for Creating Paper Cuts & Folds in modo 501 here.
9B studios writes: This video goes over the necessary steps to cut slits and fold a paper like surface using displacement and stencil effects. It uses modo and Photoshop to recreate the effect. You can download the asset your self to check it out. This video can be used for any program that supports displacement/stenciling effects in the material editor. In this case we are using modo 501 with the shader tree.