A prong style file fastener, and method of manufacturer, is disclosed which has a protective element to prevent damage to paper documents and personal injury. In one embodiment, the prongs of the fastener is covers with a heat shrinkable sheath. In another, the prongs are overcoated with a powder coating which is melted thereon. A method of applying the sheath to the prongs uses a pair of jaws to drive the sheath onto the prongs. In the case of the powdercoat covering, the production line uses a cam drive sprocket retractor to release the line onto a takeup.