What does it mean to get waitlisted during first round?

[gradapplicant15]

Does it mean qualifications were better or worse than the average of applicants?

[C10H12N2O]

Probably better. Although other factors like research fit could have something to do with you being wait listed as well. 

[perpetuavix]

Generally, waitlisted applicants are on par with admitted applicants. If a school waitlisted you, it's still an indication that they want you to attend. They just had a few people who they want slightly more and have some practical/budgetary limitations of the number of students they can admit. This is less true if the school maintains a very large waitlist or a ranked waitlist where you're near the bottom. But a waitlist is still an indication that you are a strong candidate.