Slice one vanilla bean lengthwise, from top to bottom, with a small sharp knife (a paring knife works well here). Use the backside of the knife blade to scrape out the inside of the vanilla bean. What looks like a small, thick, and sticky dark brown mass is actually the vanilla bean seeds! Add the scraped seeds to the sugar.
Pulse the food processor until the vanilla bean seeds are well distributed through the sugar. Once the seeds are thoroughly mixed into the sugar, store it in airtight glass jars kept in a dark dry place. Use anywhere you would use regular sugar.