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process of sealing itAfter two coat are applied you may lightly sand to level and smooth the finish, following this up with a vacuuming and tack ragging.  Don't  get too aggressive with this first sanding, the finish is still pretty thin and if you are not carefully you will sand through it on the edges and corners.  Re-apply one (or two) more coat(s) of shellac, and after drying sand this down thoroughly.  Your are now read for your final coat of varnish.

Finishing with **Varnish

   I like to use varnish for my final finish because it is more water and chemically resistant than shellac.  Shellac will dissolve if it is cleaned with a cleaner containing ammonia or alcohol, varnish won't.  Shellac will develop white water spots if water is left on it for long periods of time. Note: if you are doing a surface that will likely get water on it, you will want to put two or three coats of varnish over the shellac sealer to be sure that water is kept from the shellac.

Why not just use varnish and skip the shellac all together?

    Because shellac will not re-wet your stain, varnish will.  Shellac  is water thin and brushes well, even over itself.  Varnish, when used as a final protective coat over two or three quick drying coats of shellac, doesn't re-wet or soften the shellac which gives you longer working time, better sheen uniformity and less chance of brush drag and it's ugly consequences.  Except in situations subject to water, I sand thoroughly (then vac and tack) prior to the final single coat of varnish, this gives me a good level surface to which I add a final chemically resistant clear coat (varnish), and because I am going over shellac I have good working time (relatively speaking) with either quick or slower drying varnish.
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Shellac unlike some finishes,  doesn't require sanding between coats for adhesion. The second coat of shellac will melt into the first coat without the need to create a surface profile to grip to.  Another nice feature of shellac is that it will not re-wet or remove your oil based stain as a oil based sealer or varnish might, while you are in the
The Hand Rubbed Satin Finish -part 2
(for interior architectural wood finishing)
**Note: Use oil based varnish over shellac. Do not use poly-urethane or water based acrylics because they will not adhere to shellac. If in doubt Zinsser makes a wax - less shellac called "Seal Coat" use this instead of regular shellac.
click here for Seal Coat data
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