To form (a word) from its component letters.(verb)
To explain in a simple and understandable manner.(verb)
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Use "spell out" in a sentence
"Who affixes glorious names to acts of Congress—with words whose initial capital letters spell out a hard-selling acronym?"
"Also meshing with the steakhouse-like décor are carefully constructed white patterns that spell out New York, as well as the hundred or so flat-screen high-definition televisions covering bar and dining room walls."
"You have to unscramble the letters to spell out baby-related words."