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When I have cleaned brake rotors on bikes, I have used a brass wire brush on a drill. With the disc on a piece of glass (well a glass chopping board) to keep the disc flat.
This is usually after using brake cleaner in the disc. Also I clean the holes in the disc out with a drill bit. Makes sure I don't create an edge on the hole.
As for dot contamination I just use hot water and car shampoo as it doesn't contain salt.
As for centering, I thought calipers self centered.
You don't need to sand rotors unless you're switching pad compound. Sanding a contaminated rotor does fuck all apart from move the contamination around. Assuming it's mineral oil, clean rotors with IPA. If they're resin pads, bin them and put fresh ones on. Sintered you might get away with burning off the oil in the oven, but at today's energy prices, new pads are cheaper.
Assuming DOT, wash the rotors in hot soapy water. See above with pads.
Then bed the pads in properly, drag them til they're warm then 10 or so firm brakes but don't come to a standstill.