I mixed and sprayed a flat finish on a '68 Newport and I dry-sanded/scuffed with 800 between coats.

On a fender skirt I experimented with wetsanding between coats and it made no difference at all over dry sanding.

When it's all finished, you can wetsand it until it's at whatever gloss/flatness you like - again, I experimented and found that wetsand with 1200 then 2000, then a rubbing compound actually made a flat finish into a gloss finish.