Remove four to five scoops of joint compound from the bucket it comes in and put it into a clean bucket or paint pan. Use the putty knife to mix up the compound so it is soft and smooth. Generally, a couple of stirs will do for pre-mixed compound.
Scoop some compound onto the end of the 4-inch putty knife. Start at the top of the drywall seam. Press the putty knife onto the seam. Angle the putty knife in a downward direction, and slowly glide the knife along the seam, working your way to the bottom while applying a thin coat of compound. Stop and scoop more compound onto the putty knife as you work your way down so that you always have enough compound to spread on the seam. Start spreading more compound where you left off each time; continue until you reach the bottom of the seam.
Measure the seam from top to bottom. Cut the drywall tape to size with a pair of scissors. Wash the putty knife so there is no compound on it.
Press the end of the paper tape onto the compound at the top of the seam. Hold the tape with one hand; with the other hand, glide the putty knife down the tape, pressing down just hard enough for any extra compound under the tape to ooze out the sides.
Apply a thin coat of compound over the drywall paper tape. Make this coat smooth so you have no ridges or divots in the compound. Let the compound dry for 24 hours. Apply a second coat of compound and allow the compound to dry for 24 hours. On the third day, apply a third coat of joint compound and let dry for 24 hours.
Use 120-grit sandpaper to gently sand down any high spots on the compound. If you have any ridges where the compound ends, lightly sand down the ridges. The finished product will be smooth, with no dents, divots or ridges.