When should I use pipe joint compound vs. plumbers tape?

When is it appropriate to use pipe dope vs. Thread seal tape (a.k.a. PTFE tape, plumber's tape or teflon tape)?

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MORE: plumbing, ptfe tape, teflon tape, pipe dope, plumbers tape, pipe joint compound

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plumbing (3)

ptfe tape (2)

teflon tape (2)

pipe dope (1)

plumbers tape (1)