Hold the nail set on top of the nail head and tap with the hammer until the nail head is just below the surface of the wood.
Fill the hole with wood filler. You can purchase wood filler that is the same color as your wood or stain the filler later with a stain marker of the same color. Slightly overfill the hole as the filler may shrink as it dries.
Allow the wood filler to completely dry. Water-based fillers take longer to dry than solvent-based fillers. Follow the manufacturer's directions as to drying times as they will differ among manufacturers.
Sand the filler down so the hole is smooth and level with the surrounding wood. Be very careful not to harm the finish on the actual wood flooring while sanding.
Stain the filler with a stain marker if you haven't purchased pre-stained filler. Follow manufacturer's directions for the number of coats and drying time of the stain.