between the flywheel and the pickups on the stator and charge coil.
I used to place one (1) layer of masking tape to set the gap. Then when rotating the flywheel a slight rub would be seen on the tape to know I had clearance, remove the tape and reassemble.
ChampoiNman or OMC dealer would have the gauge set to make this assembly fool-proof. (CDI I believe includes instructions in their parts.)