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To redo a wall, hang drywall on top of the existing paneling. If you are covering smoke damage, take special precautions. Here are some tips:
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Materials you will need:
Tools you will need:
Hanging
Drywall
Step 1: Before You Begin
Remove molding, baseboards, batten strips,
outlet covers and wall switches.
Step 2: Measure & Cut
With a chalk line or straightedge, mark
cut line. Score deeply with a utility knife. Stand the sheet
on edge and snap the cut segment back. Slice the backing with
knife.
Step
3: Hang Panel
Start at the corner. Place first wall
panel tightly against ceiling. If panel edge doesn't center
on wall stud, trim it back until it does.
Step 4: Fasten Panel
Use 1-5/8 inch screws to secure to stud.
Drive screws 3/8 inch minimum from edge of panel. Place screws
minimum of 12 inches apart along the stud. Set screws just
below the surface of the drywall, but don't break the paper
facing.

Step
5: Fit Upper Panels
Keep joints snug. Avoid making joints
at doors and windows. Place a sheet across opening and cut
out with a saw.
Step
6: Cut Around Outlets
Measure from edge of box to edge of
last panel. Measure from the floor to the top and bottom of
the box. Cut out with saw.
Step
7: Fit Lower Panels
Place panel in position. For a tight
fit, use wooden wedge to lift lower panel firmly against upper.
Screw to wall studs.
Finishing the Drywall
To smooth the surface for painting or wallpapering, the joints and fasteners need to be hidden.
There are three types of joints: tapered (factory-indented), non-tapered (edges you cut yourself) and inside corners. The first coat is applied differently for each joint, as well as for covering drywall screw indentations.

First Coat of Joint Compound
Non-tapered
Joint
Apply thin bed (1/16 inch) of compound
(mud). Press tape into mud and cover with another thick layer
of compound.
Tapered
Joint
Step A:
With 6-inch taping knife held at a 45
degree angle, fill tapered joint with compound.
Step
B:
Center tape over joint. Press into mud
coat. Cover with smooth, thin layer of mud. Allow to dry.
Inside
Corner
Apply compound. Fold tape down the center
and press into corner. Cover each side with thin layer of
mud.
Screw
Indentations
Cover screw heads with compound, passing
over indentations several times to fill depressions. Scrape
away any excess.
Fix-It-Tips!
A quick wipe with a damp sponge will
smooth out any knife marks after joint compound has begun
to set up.
Finishing Steps
Step
1: Second Coat
Be sure the first coat is dry. Apply
compound with a 12-inch taping knife. Feather the edges. On
non-tapered joints, spread feathering out 10 to 12 inches
to minimize the seam.
On inside corners, do one side, let compound dry, then do second side, or use a corner knife.
Cover screw heads with second coat. Feather the edges.
Step 2: Third Coat
Thin compound with water. Apply a light
coating over all mudded areas. Let dry.
Step
3: Sand
Put a dust mask over your nose and mouth.
Sand lightly to smooth mudded surface.
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