There are five Compression settings. The adjustment bolt can be found on the leftside top of the shock. You need a 3/8" ratchet, 12mm socket, 6" extention. Always rotate the bolt clockwise. The setting can vary per preference, style and load.
There are four Rebound settings. The adjustments can be found on the rightside bottom of the shock covered by a small piece of plastic. The usual settings are either #2 or #3.
Do yourself a favor and purchase MotoWizard Preload Adjusters. The drain the fork oil and refill with ATF to a level of 170cm from the top of the fork tube. The preload adjusters make a big difference when setting up your KLR. You can adjust them by stopping, loosen(uncompress) or tighten(compress) the adjuster til you find what is good for you. You can make these simple adjustments before and after going off-road.
Do a search on the forums and you will find many opinions and they are all correct, for the author. Read and experiment is my suggestion.
Hope this helps.
2005 KLR 685
2015 Yamaha Super Tenere ES, 5/23/2015
2012 Yamaha Super Tenere; Purchased 7/30/2011; Sold 5/23/2015