I wet the leather enough to wrap it around the gun and pressing along the contour of the gun to form that shape. I'll use a boner to do this as well. Once that stitch line is established, and the leather is still a little wet, I flatten it out and continue with the process.
About the time I'm done cutting the holster to shape, grooving for stitching, rounding the edges etc. it's still damp and I then dye.
Let dry, then stitch.
As I always say about this leather work, you line up six guys and ask them the same "how to" question, you'll likely get six different answers.