I've made several pens with decals (also called water slides) on them. It's really quite simple. Once you get the design printed on the decal paper, let the ink set for a while to dry. I let mine set for about an hour (probably overkill). Then spray it with a bonder (I use Tester's bonder but I think any clear lacquer will do.) Let that dry per the bonder directions. Cut the design out leaving a little extra room around the perimeter. Put in water for about 10 seconds then set it on a paper towel for about a minute. The water will allow the decal to slide off the backer (hence the term water slide). Put the decal on the pen and make sure you rub all the water and air out from under the decal. I use a small acid brush or artist paint brush. Oh yeah, make sure the pen is sanded and has a few coats of CA for the decal to adhere to. The pen should also be fairly straight (not bulbous). Once everything looks good, just let it dry over night. I then finish with CA as normal.
Here are some examples.
