Plywood comes in two distinctive types. Fir plywood is primarily used for structural purposes and is rarely finished. Hardwood plywood often has interior uses, such as cabinets and furniture, and is always finished. Built to high standards, hardwood plywood is pre-sanded by the manufacturer, making it one of the best products for finishing.
Even though hardwood plywood is pre-finished at the factory, it gets small scratches while you work with it. When you cut plywood on a table saw you scratch it. When you slide it across a table it gets scratches. These small scratches need to be removed before finishing. In addition, some manufacturers use 100-grit sanding belts on hardwood plywood. Some woodworkers consider this too coarse for a good finish, and prefer to sand the plywood again. Just before you're ready to apply a finish, attach a piece of 180-grit sandpaper to a hand block and lightly sand the plywood. Always sand parallel to the grain. If you want, you can also use an oscillating tool with a sanding accessory to sand the plywood. After sanding, check for scratches. If you see any, sand the plywood again.
Plywood is almost always stained to bring out grain patterns. Plywood soaks up stain rapidly. You can't let the stain remain on the surface of the plywood for more that a few minutes, and the time exposure to stain should be consistent to get even colors on the plywood. For this reason, you should spray the stain on. Fill a 1-qt. spray gun with stain. Liberally spray the plywood until it is completely coated with stain. Immediately grab a soft cloth, preferably cotton, and wipe the stain off as fast as possible. Let the plywood dry for 15 minutes and check for blotches. If you see blotches, respray and wipe again.
You can apply lacquer after the stain has dried for one hour. It's best to spray lacquer; you get even coverage, with far better results than brushing it on. Fill an airless or pressurized spray gun tank with lacquer. Hold the gun 8 inches from the plywood at a 30-degree angle. Moving the gun at a steady pace, shoot a light band of lacquer over the plywood. When you get to the end of the plywood, shoot another band of lacquer, overlapping the first band by 1 inch. Continue in this manner until the surface of the plywood is consistently wet with lacquer. Let the lacquer dry for 30 minutes.
Fold a piece of 180-grit sandpaper four times and use it to lightly sand the entire surface of the plywood again. This sanding produces a light, white powder. This is good. It means that you have a smooth, even first coat of lacquer on the plywood, and that it is sealed properly. Don't remove the white powder; it will help cure the next coat. Spray another coat of lacquer on the plywood just as you did before. You only need two coats. Let the lacquer dry four hours before handling.