Prepare the Surface
Make sure that all nail or screw heads are below the surface. Drag a taping knife over surface and tighten up any fasteners the knife contacts.
If there are any torn paper edges on the drywall, cut them off with a razor or other sharp tool.
Choose Your Tape and Mud
Drywall tape is available in two major types. As a general rule, I always use paper tape for inside corners, but I don’t have much of a preference for flat surfaces.
Joint compound is available in premixed and powdered forms. Premixed all-purpose compound is the best choice for most jobs. Give the mud a good stir.
Apply the First Coat
Fiberglass-mesh tape is self-adhesive and can be applied directly to the drywall. Paper tape must be embedded in a layer of compound. That makes the mesh tape a little quicker on the first step, but the time saved is not significant.
When using paper, scoop some mud into a compound tray. With a 6-inch taping knife, apply a smooth, thin layer over the joint. Immediately press the tape into the mud, centered over the joint.
Hold the tape in place with one hand while pulling the taping knife over the tape (work from the middle of the joint toward the edges). Apply just enough pressure to squeeze a little compound out from under the tape.
Immediately apply another thin layer of compound to cover the tape and fill the joint.
With fiberglass-mesh tape, apply a layer of compound thick enough to fill and cover the mesh surface. Smooth the surface and feather the edges as best as you can.
Repeat these steps on each joint. Once you’ve taped the joints on the flat surfaces, start finishing the inside corners.
With the joints all taped, apply a small amount of compound over each nail or screw head and smooth the surface.
Let the compound dry overnight, or longer if necessary. Clean the tools and put the lid back on the mud bucket.
Add the Fill Coat
Lightly sand the dried compound to remove ridges and bumps. (Wear a dust mask while sanding.)
Use a 10- or 12-inch knife to spread another layer of compound over the joints, feathering the edges. Once dry, give the surface another light sanding.
Apply the Finish Coat
If you’ve taken care applying and sanding the first coats, the finish coat should require only a light application to create a smooth surface. Use the wide knife or a drywall trowel to apply this coat.
Some pros add a little water to the mud before the final coat (but never more than the equivalent of one pint of water to a five-gallon bucket). Thinning the mud for the final coat strikes me as a smart idea, but I never remember to do it. Be sure to mix the water in thoroughly.
Sand the dried compound. Don’t be afraid to apply another thin layer if you aren’t satisfied with the finish.