When you say pencil size from the 1980w, you mean the shaft of a pencil? Presumably this little bit of tissue had several follicles? When I heard the term in the past I thought they were little wigs you wore in the receded area!
A hollow drill was used in the back of the head that cored out a pencil size plug of hair. These were placed in the front in rows. Only a quarter of an area was covered with each of four surgeries with the idea that when eventually filled in, the four quarter patterns would cover the balding areas. Unfortunately, the idea was flawed, because after the plug was put into the scalp, it would contract squeezing the plug to a very high hair density. The the central part, would die off so that the plug looked like donuts. With these high density plugs surrounding a hole in the center, the unfortunate victims has a pattern of hair plugs that anyone could see within 20 feet. I, personally, can’t believe that the public accepted this result, but they did, maybe because they felt that a dolls head of hair was better than a bald head of no hair.