basically adjusts the slack in the trigger. while some say and are probably right that it is not a true two stage trigger all of my TO5 triggers had the impression of two stages even though the "first stage" comes only from overcoming some spring tension. all felt as though there was a light first stage and a distinct second stage with very little creep if any. the design just does not have an adjustable sear engagement like a real two stage trigger would have.
the "first stage" in this trigger is set up by a fixed hump on the trigger blade. if you look at the trigger blade there is a small metal pin near the upper edge. that is realy the sear engagement depth regulator. it is the "first stage" but the ability to adjust it has been taken away from you. when you start to pull the trigger that hump contacts the rocker and sets the sear at its fixed lettoff point. when the screw tip makes contact with the rocker it trips it. the slack bewtween these two "stages" is regulated by the position of this screw tip where it contacts the rocker. this can be pretty short or fairly long. this screw also changes very slightly the leverage by where it makes contact with the rocker. the rocker is a lever. changing the length of slack changes the effective lever length and gives the impression of a lighter or stiffer trigger.
in warren's gun (my old 46 stutzen) the hump and pin was replaced with another screw which allowed me to adjust the sear engagement depth. this creates more of a two stage trigger feel.