How To Adjust A Mountain Bike Derailleur. Thats a barrel adjuster which is used to tune the derailleur adjustment. The B-screw controls the derailleur bodys angle in relation to the sprocket-set.

Adjust the L-screw so the inside of the cage has a small gap. Setting Up High Gear. Shift into the second largest cog in the cassette.
The top pulley should align with the largest cog in the cassette.
If the chainring is rubbing slightly you can check the derailleur and make the adjustment on the limit screws specifically the limit of the high gear which is the small sprocket. If the chain does not break and the cage is frozen loosen 1 8 rotation of the L-Limit screw counterclockwise. Adjust the B-screw until the pulley rubs the large sprocket and then tighten the screw until it barely clears and the chain does not bind. If you are lucky the screw will be marked with an L.
