Sir Delius was given a look at the Flemington course proper, galloping on his own on Tuesday morning, quickening up over the final 1200m.
"I thought he worked very well," Waterhouse said.
"He was leisurely in his gallop, but very happy and I liked the way he went right through the line.
"After his Underwood win he looks bigger and stronger and pulled up in good condition. You like them to be at their winning weight, and he certainly looks good.
"The people paid a lot of money for the horse and it's nice when they deliver.
"He's on the right track for the Melbourne Cup which was the whole point of why we bought him."
Last year's Lexus Melbourne Cup winner Knight's Choice was a notable absentee from the first acceptances on Tuesday following a shutdown of Macedon Lodge where the stayer was being prepared for his Cup defence following an outbreak of strangles.
While Knight's Choice is not among the 66 remaining, Waterhouse and Bott also have Vauban remaining in the hunt for Lexus Melbourne Cup honours while the two horses at the top of the weights, Via Sistina and Al Riffa also remain in contention.
Golden Ticket winners Deakin, Parchment Party and Revelare remain in the hunt and besides Al Riffa and Parchment Party, there are another nine horses from international stables amongst first acceptances.