With Heat:
Use a curling iron or a round heat barrel, take small pieces of your hair and wrap it around the curling iron. The key is to take different sized pieces of hair and wrap them different ways around the curling iron barrel. Doing it like this will ensure that your waves look natural.
Without Heat:
Personally, bantu knot outs do not work on wet hair so I would have to start with dry hair and use a leave in spray to dampen the hair. Once the hair is damp I create little buns all over and once it's dry I remove the buns and waves are in place. Just like when I use use heat, I create different sized buns to create more natural looking waves.