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The idea is that you achieve less friction in the motor by setting looser clearances. A higher volume oil pump may accompany this modification to ensure adequate flow. Naturally, as it is for racing appliations, it won't last as long, but .001" is not a lot looser either. Keep in mind that a lot of racing engine builders set their motors to facory clearance.
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1993 Civic DX w/ JRSC H22, 9 psi underdrive, Hondata S300, MSD Ignition, Koni adjustable/Skunk2 coilovers and cam gears, Competition V2 wheels with M&H slicks, and JDM washer solvent. 248 whp/236 tq, best 1/4 mile 13.2 sec. @105 mph.
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