It adjusts the sensitivity of the automatic bag door system. Dial down for more sensitivity, for fine dust and powdery dirt. Dial up for less sensitivity, for loose debris. The higher the setting, the more bag will fill, before it opens the bag door. But remember, as with any vacuum, the more you fill it, the less the air effeciency. When I'm done servicing a Lux., I put the dial in the middle, which is where it should be set (most of the time).
www.vacuumcleanerhelp.com, May 2007