Usually the spot should be really well sanded down with some good carpentry sandpaper. You may have no choice but to start all over with that spot. If it bothers you enough, try sanding it down and repainting. Mud should always be put on in a thin layer, thickening as needed.
You can simply improve the finish of the wall by smearing on a coat of plaster. Just mix plaster to form a soft thick paste that can be easily applied yet isn't so soft so as to come off. Then gently apply it on the wall with a flat spatula shaped tool. Fill in the areas that are caved in so as to make them level with those that seem to be bulging out. You don't have to sand the wall first, just follow the procedure and then paint it afresh. This will totally improve the finish of the wall and hide all traces of the bad mud job lying beneath.