An apparatus and method for applying a thermoplastic powder to threads located in a bore of an internally threaded fastener having a powder supply conduit in communication with a powder source and a powder application conduit defining a first passageway having a powder discharge port and a second passageway having a powder inlet port located adjacent the discharge port which is in communication with a powder collection system. The powder application conduit is movable for insertion into and through the bore of the fastener and into engagement with the powder supply conduit. The engagement forms a nozzle which directs powder through the powder discharge port onto the threads of the fastener and retrieves excess powder through the powder inlet port for conveyance to the powder collection system.