@derickflorian , you need to find 2 sheep, and feed them wheat. They breed, and then you make shears to get wool.
@trinsec @JonKramer thank you all. I will have to look into that. My shelter seems really safe with all the lights so i can focus on higher order things like sleep, a stone house and maybe a fenced in sheep area!
@JonKramer
Can confirm. Shearing also gives more wool than just killing them. And when they live on grass blocks, they replenish their wool after eating grass (block turns to dirt).
@derickflorian