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Friction modifier is just a lube you dump into the diff to improve performance of the LS unit. It actually decreases friction in the diff to prevent noise and chatter under normal operating conditions and provides longer life of the clutches.
It's available at any Ford dealer, and I think some of the aftermarket companies such as Amsoil and Redline.
I don't remember how much to add off the top of my head, check your owners manual or ask the tech when you're at the dealer getting the stuff.