Jude is writing to those that are "sanctified by God the Father". Since his message of infiltration into the church is so important, it is many for all Christians. Hence, Jude is under the assumptions that all Christians are "set apart" for God's work and "separate" from the world. It is also important to note that Jude says "sanctified BY God the Father". It is through nothing that we can do on our own.
The application: The first sanctification is mentioned in Lev. 11:44 when God tells Israel that "ye shall be holy, for I am holy". All through the Old Testament, God demands sanctification from His chosen people before an important event (Mum. 11:18, Josh. 3:5, I Sam. 16:5). God sanctifies us at salvation from the world to His work and perfect plan, and commands us to be sanctified not just for big events but at all times! How can we live up to such standards in a world like this? Jesus, who Himself was sanctified (John 10:36), asked God to sanctify believers through His truth; "thy Word is truth" (John 17:17). "And the Word became flesh..." So in order to be sanctified, we must really on Jesus Christ and His Word to do the work through us and in us. Paul mentions being "sanctified in Jesus Christ" (I Cor. 1:2). Hebrews 10:14 says, "For by one offering (death on the cross) he (Jesus) hath perfected for ever them that are sanctified." Our answer to being different from the world and following God's plan for our lives comes through intimately knowing Jesus Christ, the living Word! Them we also must, in return, "sanctify the Lord God in [our] hearts", to be ready to give an answer for why we believe what we believe.