On my K301, on the opposite side of the engine , in the tin, is a "window" about the size of a nickel. Looking thru there you should see a letter ( I think it's "S" ). As it comes into view, the points should open fully. That is where you set the gap.
I added a couple arrows to your picture. Slightly loosen the screw ( just so it's still against the plate ) and stick a screw driver into where the red arrow is. Pivot the breaker plate ( green arrow ) to get the correct gap. Then tighten the screw and double check the gap.
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