Doesn't matter where the collar is when you install everything, so long as the shift fork engages it properly.

 

^ correct. identify the position of the shift fork, and slide the collar to the same place. apply rtv to the cad opening. then with superman-type eyes that can see through steel, install the cad with the almost invisible fork engaging the almost invisible collar. snug it up and connect vac lines. then with front end jacked up, start truck and shift to 4wd, then turn engine off. spin passenger side and verify that either drivers side tire and/or driveshaft turns. this is the locked position. then start truck and shift to 2wd and turn engine off. spin passenger side and verify nothing else turns. this is the unlocked position.

if its not engaging and disengaging properly, then you might have to either put both axles on jacks, or either drive it a few yards to allow the rotation to assist the lock/unlock.