The gap is the distance between the cam lobe (big end not the "Pointy" end) and the rocker arm pad. Its the point when the valve is fully closed. The cam needs a small clearance to rotate around without touching the pad in this area. It allows oil to lubricate the cam so it doesnt overheat. You need to adjust the valves when the cam's pointed end of the lobe is directly opposite the lash pad I usually put the car into 2nd gear and roll it backwards to get the cam into postion. Make sure you mark down on a piece of paper the valve numbers you've done just so you dont miss any.