Draw a line straight down the pipe, from end to end. Draw another line down the pipe that is 3 inches away from and parallel to the first. Draw 10 X's on each line so they are spaced 7/8 inch apart, with the two outside X's 5/8 inch away from the ends of the pipe. The sets of X's between the pair of lines should be aligned. Drill a 3/8-inch hole in each of the X's.
Draw 10 pairs of 12-inch lines around the pipe. Each pair should be 3/8 inch apart and should touch the tangents of the holes drilled.
Secure the pipe in the vice and cut along the lines with your hack saw. The pieces you're removing are slots for your CDs.
Sand down the edges that were cut with your sand paper. Position the pipe on one of its ends and slide your CDs into the slots you cut in the previous step.