Das Nähgarn liegt neben der Stopfwolle.

They are in different cases here.

• das Nähgarn is the subject of the sentence, so it is in the nominative case.
• der Stopfwolle comes after neben, and in this sentence neben is used for a location, so it takes the dative case.

Also, the basic dictionary forms are:

• das Nähgarn
• die Stopfwolle

So der Stopfwolle does not mean the noun is masculine. It is still a feminine noun; die simply changes to der in the dative singular.

Because Stopfwolle is a feminine singular noun, and the dative singular article for feminine nouns is der.

So:

• nominative: die Stopfwolle
• dative: der Stopfwolle

This is very common in German:

• die Tasche → in der Tasche
• die Küche → in der Küche
• die Stopfwolle → neben der Stopfwolle

Neben is a two-way preposition. That means it can take either:

• dative for location: where something is
• accusative for direction/movement: where something is going

Here, the sentence describes a position, not movement, so German uses the dative:

• Das Nähgarn liegt neben der Stopfwolle.
  The sewing thread is located next to the darning wool.

Compare that with movement:

• Ich lege das Nähgarn neben die Stopfwolle.
  I put the sewing thread next to the darning wool.

So:

• wo? (where?) → dative
• wohin? (to where?) → accusative

German often prefers a position verb when talking about where something is.

Here, liegen means to lie or to be lying. It is commonly used for things that are resting somewhere, especially things that are not upright.

So Das Nähgarn liegt ... sounds natural.

You could sometimes say ist in everyday speech, but liegt is more idiomatic and more precise. German often distinguishes between:

• liegen = lie / be lying
• stehen = stand / be standing
• sitzen = sit / be sitting
• hängen = hang / be hanging

English usually just says is, but German often chooses the more specific verb.

Because the subject is singular: das Nähgarn.

The verb has to agree with the subject:

• das Nähgarn liegt = singular
• die Nähgarne liegen = plural

So liegt is the correct third-person singular form of liegen.

Yes. German makes lots of compound nouns, and they are usually written as one word.

• Nähgarn = Näh-
  • Garn
• Stopfwolle = Stopf-
  • Wolle

A very important rule is that the last part of a compound determines the noun’s gender and basic category.

So:

• Garn is neuter → das Nähgarn
• Wolle is feminine → die Stopfwolle

This rule helps a lot when learning German vocabulary.

They come from verbs:

• nähen = to sew
• stopfen = to darn / mend

So:

• Nähgarn is thread used for sewing
• Stopfwolle is wool used for darning or mending

In compounds, these first parts often tell you the purpose of the object.

Yes. German main clauses follow the verb-second rule, which means the finite verb must stay in the second position.

The original sentence is the neutral order:

• Das Nähgarn liegt neben der Stopfwolle.

But you can also move the location phrase to the front:

• Neben der Stopfwolle liegt das Nähgarn.

That is also correct. It changes the emphasis slightly, but the meaning stays basically the same.

Because all nouns are capitalized in German.

So in this sentence:

• Das = article, capitalized because it begins the sentence
• Nähgarn = noun, capitalized
• Stopfwolle = noun, capitalized

This is a standard rule in German writing.

A learner-friendly approximation is:

• Nähgarn ≈ NAY-garn
• Stopfwolle ≈ SHTOPF-vol-uh

A few useful pronunciation points:

• ä in Näh- is a long vowel.
• St at the beginning of Stopfwolle is pronounced sht in standard German.
• German w sounds like English v.
• The final -e in Wolle is a soft uh sound.

If you want a rough IPA version:

• Nähgarn: /ˈnɛːɡaʁn/
• Stopfwolle: /ˈʃtɔpfˌvɔlə/

It is understandable, but it sounds less natural in most situations.

German often prefers a position verb like liegt when talking about the location of an object. So:

• Neben der Stopfwolle liegt das Nähgarn. = more natural
• Neben der Stopfwolle ist das Nähgarn. = understandable, but less idiomatic

So for natural German, liegt is the better choice here.