That plug is there to divert oil to the oil filter and back. If you look on the back of the block you'll see the raised oil galleys leading from the rear main to the pass side of the block to the oil filter. Since you drilled the step out you'll have to shine a light through the upper galley coming from the oil filter and drive the plug in to where it's dead center between the 2 galleys. You want to divide those 2 galley's so oil flows to the oil filter and back