water heater drain plug

Depends of what type of water heater you have. A suburban should have an anode rod type plug and Teflon tape works great on those threads. An Atwood water heater doesn't use an anode rod and use a plastic/pvc type plug that can also benefit from Teflon tape but doesn't always require it.
Flush out the heater and use a wire brush on the threads of hole to get rid of the gunk. I put a piece of tubing on the end of a nozzle and shove it up into the heater to flush it out.