Its a line dressing to help make your flyline [ or leader] float. Simply wipe it on whatever you want to float either with a cloth or an impregnated pad or even your fingers.
Sometimes even the best floating lines start to sink and will need a bit of "stuff" to make them float again. You use it when & where you need it.....and that depends on what your line is doing. Usually I would say its the tip of a floating line that might need a bit of dressing though sometimes having the top few feet "just under" is a definite advantage. You've then got what is effectively a "sink tip".
So if I dress the actual fly line and leave the last 3ft this will sink and the lure will sink further? Do I need something on the leader to make this sink as well? And if I am dry fly fishing do I dress the leader with this stuff to make it float or is it just for the main line..
Sorry, bit of a numpty,