I want to measure my backlash, how do I set up my dial indicator to accomplish this?

 

For the rear gear, nothing special about this. With dry gears just mount the indicator so the rod is on the face of the gear so when you turn the gear against the pinion you can read the movement on the dial. I've done this before without an indicator, have some lash with dry gears and when the cold gear lube coats the gears the lash disappears. Getting the right pattern is the critical part of the setup.

 

you can mount the base anywhere that works and i try to have the plunger mounted sqoare to the gear tooth so any movement directly moves the plunger instead of it being more of an angular arrangement. if you have the pinion depth correct and the back lash correct the contact pattern will be there and it is the least important part of setting the rear up. the contact pattern test is very subjective as opposed to all the other steps which would all be qualtative and hard to devaiate from.