Make Linux smaller???
 

I just finished making my own Linux From Scratch distro but it is still roughly 300MB large. It is the bare minimum.

I used the CFLAGS and CXXFLAGS, -Os -s

It runs off a minimum of 10MB of RAM and a P1 CPU.

How does a linux distro like Dimi Small Linux manage to be less than 50MB and still have a GUI?

Some of the really small distros such as Tiny Core Linux make use of xvesa instead of a full blown xorg server (which not only saves install size, but dramatically reduces the RAM required). They are also selective with which packages are installed, and will use 'shells' such as busybox to reduce the number of utilities required.