I actually apply water based poly and even waterlox using a paper towel. I try to find the ones that are smooth as opposed to the ones with a textured surface. I generally wet the surface with finish and use a second clean paper towel to wipe off the excess. This applies a much thinner coat which dries fast and does not show brush marks etc. I sand with 500 grit between coats and clean the surface with a tack cloth before the next coat. I generally apply 6-8 coats and for the final two coats, In the case of water based poly, I use it straight from the can. When applying Waterlox, I dilute the last 2 coats by 50% with mineral spirits. In both cases, I sand with 1000 grit before the final coat and when applying the final coat I buff in the finish so it dries very quick and there are typically no rough spots from dust.