I have used Mikes XS damper valves in Yamaha Vision forks, and they work well. The damper valve is supposed to seal against the top of the damping tube, and it looks like it does in your picture. So, that should work. As far as the holes, the smaller ones are rebound usually, and the larger ones compression. I had to drill the extra set of holes on my damper rods on the Vision, so perhaps that has already been done by a P.O. It looks like someone has tried to add a valve to the fork as that looks like one in the pic with all the holes in it. If it isn't in the stock forks, that might be the case. The damper holes were 5/16" drilled out, so measure the holes you have. The spring on the top of the damper valve controls compression damping, and usually set to between 2 and 4 turns in, more for racing. Hope you get it sorted out!
Charlie