IAC function
 

So ive searched several time over the weekend about the iac's function, but i still have some unanswered questions. I have a 1987 turbo II if it makes a difference, but it does have emissions deleted. I want to keep the iac but i would like to know if the rubber hose in the image has to keep the lower tube plugged? Secondly when the adjuster screw on the iac is turbed clockwise does it increase idle speed or is it the other way around?
https://cimg4.ibsrv.net/gimg/www.rx7...65b035bbf5.jpg

This is an idle control device called the BAC. The lower tube takes intake air (post-compressor for turbo II) and is controlled by the computer via the solenoid inside. The screw is used for adjusting idle using the steps outlined in the FSM. It allows a small amount of air to bypass the solenoid, and by proxy, the throttle body as well. Read up on it in the FSM. It tells you how to set your idle. Don't monkey with your throttle body

So are you saying that the hose covering the intake tube should be removed, i bought the car with it like that but it seemed counterproductive

Yes. That hose can't be plugged for it to do any idle adjustment. That hose needs to go to the intercooler piping. The stock pipe is right after the turbo compressor, but before the intercooler, but if you have an aftermarket setup, anywhere between the compressor and throttle body will do.
it has to draw air from after the compressor or it will create vacuum and boost issues

Okay that makes alot of sense actually thanks for the help, i appreciate it

Hmm I'm in the same question as you. Just got a s5 t2 that still has the BAC valve in place with the lower nipple blocked off. Mine does however have a power fc in it. Should I run this to the intercooler piping as recommended?

I would. I don't know if the PowerFC can run the BAC, though I don't see why it couldn't. The bottom port of the BAC feeds air to 2 parts: the idle air adjustment screw, and the BAC solenoid. The screw and the solenoid function independently from one another, although they are packaged together in one assembly. The idle air adjustment screw provides a fine adjustment for setting idle, and is a static part during engine operation. The BAC solenoid is controlled by the computer to smooth out the idle by providing a measured amount of air to supplement what is going through the throttle body and the idle air screw. It's not going to affect high end performance. This device is to make the engine more enjoyable while you are puttering around town, sitting in traffic, etc. If you're running a racecar, there's no need to have it.

If the BAC is blocked off at the bottom port, it doesn't matter if the screw is adjusted, or the solenoid is plugged in, it will do nothing, and you will be relying on the set screw at the throttle body to be your idle set. This can vary some, as there will be a small amount of lash involved with each opening and closing of the throttle body.