Hey CBJ, what sort of Dyna ignition are you fitting? That 1 & 4 thing probably refers to the side the 1 & 4 coil mounts onto your frame, but is a pretty dumb description, what's wrong with "The kick starter side", or the "Gear pedal side"? Anyway, unless it's a Dyna 2000 or better, leave that pin in place, or your advance unit won't, er, advance!
If it's one of them fancy-schmancy Dyna 200's that I can't afford, don't ask me 'cos I'm so jealous I'd just lie to ya anyway, ha ha! Cheers, Terry.