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Re: Teflon Tape or Plumbers Putty?

Threads in drain hole and on anode rod are 'tapered' so that they seal against each other.

I suggest you get a 3/4" NPT nipple made of steel and run it in drain hole to chase and clean threads up.
Screw in by hand then tighten, loosen, tighten some more, loosen, tighten more etc until threads are clean.

If reusing anode rod......clean up threads with a stiff wire brush or wire wheel

Then use teflon tape or plumbers putty.......either will work
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