Well there all happly tied in together.But for me to explain how to set I will go this route.Your distributor controls the timming of the spark to the cylinder.Every time the rotor turns past the sparkplug wire it sending a charge of electric current to the spark plugs.It all happens very fast look at your tac.0-6000rpms thats up to 6,000 times per minute.What you are doing is setting the timming of the spark to the cylinder.By doing this you will most likley
need a timming light.The distributor has a bolt on it.When you loosen it the distributor
will move right and left.That will help set your timming.Ok on your viewing point is the bottom pully.The big pully at the very bottom
If you look closely"you may have to turn it by hand or bump the engine over tell you see it"And maybe clean it off also".You will see the noch or line on the harmonic balancer.You should also see the scale it will have numbers or line marks If it has numbers it will be easyer but if it does not
you may have to count and guess,if it not right you will know it.Your timming light will connect to the #1 cylinder sparkplug wire very first one close to the radiator.The other 2 conectors plug on the batery RED+ black - With the ditributor bolt just loose enough to barely turn the distributor by hand and engine running at operating temperature.You may start. With the timming light pointed at the harmonic balancer the srobe will flash every time #1 hits.With the light fashing you will notice the notch it maybe off a little or a lot if its off alot then turn the distributor both ways slowly tell you find it.You may have to put the timming light down and walk to the side so not to get caught in the fan Or have someone to turn while you point the light.Once you have found this famous notch you can try to line it up to the scale 6to 8 or were it will run good. mine is set a 9 yours may run better at 8. On his TFI instructions he says 6 to 8 you can try that also. If you have a chilton or haynes manual it will better help you understand.Haynes being better for tune ups.After you get it set tighten the disributor bolt back down then recheck the timming to make sure you didnt move the distributor as you were tighting it. Then test drive and check for performance.if its not running right do it again tell its right.Sorry if this is choppy but kinda hard to explain on the internet...Hope this helps.