I have an early 99 psd. I have changed the fuel filter myself, but is there a place that I am to drain the water out of? There wasn't any water were the filter goes.

 

Welcome FTE!
There is a valve with a yellow lever on the back side of the fuel filter housing. Turning this lever clockwise will drain the fuel from the housing thru a long tube that exits from under the front of the engine on the passenger side. I usually place a hose on the tube to catch the fuel in a bottle to check for water.