Before applying paint, paper or other covering to your walls, you need to repair any holes.
Fill nail holes and small punctures with spackling compound. When dry, sand lightly. If the hole is next to an electrical outlet, you may be able to conceal the damage with a larger outlet box or an oversized outlet cover plate. For larger holes, you will need to patch the damaged area.
CAUTION! Determine where the electrical wiring is located before cutting into a wall.
If the hole is no bigger than two inches, repair with fiberglass tape. Stretch tape across the hole. Apply two or three coats of joint compound and sand between coats.
Cut a square area larger than the hole with a utility knife or keyhole saw.
Cut two backer boards so they are 2 to 3 inches wider than the hole.
Place a backer board inside the hole at top edge. Secure with 1-1/4 drywall screws, holding the board in place as you work. Tighten until screw heads are below the surface. Place second backer board inside lower edge of opening. Secure with screws.
Cut patch to fit opening. Screw patch to the backer and tighten until screw heads are below the surface.
Apply strips of fiberglass tape over seams.
Cover tape with a thin coat of compound. When dry, sand lightly. Apply two more coats. Feather and sand each coat until the surface is smooth.
For holes larger than 8 inches, cut drywall back to middle of the studs bordering the hole. Butt backer boards to studs and secure behind drywall with screws. Fit patch into opening. Secure to the studs and backer boards with screws. Finish with fiberglass tape and joint compound.