potential scroll system

1) item drops with "Hidden Potential"
2) use Magnifying Glass on it
3) item becomes Rare/Epic/Unique

 Spoiler

If your item does not have "Hidden Potential" (red outline), you can't use the magnifying glass.
If your item is Rare/Epic/Unique, you can't use the magnifying glass.

Oh, so if the item dropped from a monster you can use the Mag. Glass first? But if say you bought it from a NPC, Gacha or maker skill you have to use a Potential scroll before you can use the Mag. Glass? Correct anything I may be wrong on please. =)