I've used Dullcote for years and I've never seen a sandpaper like rough finish. The spray cans tend to leave a mottled finish I think because the cheap nozzles Testor's uses don't break the paint down into fine droplets. Most of the time I use an external mix airbrush with about 2/3 Dullcote and 1/3 thinner. This gives a very fine mist.
I think you might be using too high air pressure which is causing the paint to dry before it hits the surface. The earlier suggestion of trying different air pressures is a good one. Otherwise it might be your airbrush isn't atomizing the paint properly or the Dullcote isn't compatible with the hardware store lacquer thinner your using.
The only time I've seen a whitish tinge to Dullcote is when spraying in high humidity.
Ken
