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It’s inside the frame rail, basically underneath the driver’s seat. It’s a round plug on the side of your HFCM (horizontal fuel conditioning module, contains the fuel pump as well) that’s facing your front driveshaft if you have 4x4, your transmission if 2wd.
According to Ford it is to be drained monthly, and it only takes a few seconds once the plug is out...but I’m guessing very few actually do that.
Also, there is an updated brass plug to replace the steel one, I highly suggest you get that if your truck doesn’t already have it. They’re about $12-15
It's on the fuel pump which is mounted on the driver's side frame rail. There is a plug on the side that requires an Allen wrench to unscrew. Be careful that you don't strip out the wrench hole - a known problem. If it's been a while, there could be a lot of gunk inside. Get some kind of spray cleaner to shoot inside. Worst case, you gotta take the whole cover off the separator to clean it up. Can't remember if that requires taking the pump off, but it's a pretty tight space there.
I do this periodically when the water in fuel light comes on. I usually get some aluminum foil and form a path for the fuel to drain into an old bucket I use. Otherwise it tends to get all over the frame rail and anything else in the way. Power Service 911 will help a little also by getting rid of water in your fuel.
The water reservoir in these HFCM's is small. IMO it is wise to do it routinely and not wait for the light. How often routinely is will depend on the quality of fuel in your area, but at least do it every oil change. Algae can grow and corrosion can begin to cause damage if water is left in them very long.
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