The tone ring is a steel wheel with squared off teeth on it, about 5" diameter, in the rear axle, that rotates in close proximity to something that resembles a single-pole electric guitar pickup. This generates a tone, which varies with speed and is interpreted by the electronic speedometer on 740s (and later 240s) If the car has ABS, there are additional tone rings on the front wheels. The ABS computer compares the tone produced by all three sources, and if one of them is flat by more than a certain threshold, it means that wheel is rotating too slowly (locking up, or about to) and it triggers the modulator to pulse the brakes rapidly. For whatever reason, the number of teeth on the ring was changed at some point, so if you swap an axle from a different year car, your speedometer may be way off, and the ABS (if equipped) won't work at all. This change occurred between the 88 and 90 model years, and I am trying to determine if there was another change on later models. I am considering buying a 940, all of which are automatics, and I would want to convert it to an M46 and 3.31 axle. The parts I have are from a 90. I found out about tone ring incompatibility the hard way, when I put these components in my 88, and want to avoid a repeat.

I build instruments too. One of them is an all-metal bouzouki, the body of which is a 140 bellhousing.