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Thats the PCV valve. Mine goes from that to the stock air box. However mine is a T1 w/o intercooler. But thats probably where yours goes too
+1, that is what it is, there should be a hose hook up spot on the air box that goes onto it. It is something that a lot of people use a different style of air filter and just get rid of the air box. That is what I did, and the liquid coming out is oil that did not get separated out of the air before hitting the PCV system.
 

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If you really want to help with the oil problem, you can go to the TBI valve covers that have the metal splash guard on the inside and put it on. That way you have 2 different ports that you could run the air filter on one, and then put the PCV valve on the other and run it that way. That is how I had my car setup prior to me parting it out.
 

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if I put a little filter like you guys have ...would that eliminate my little line problem?
It could cause a issue with crankcase pressure, making your dipstick shoot out hitting the hood. A catchcan would be much better or you could get a piece 3"(in length, not sure what the diameter is inside the hole) straight pipe drill a hole into the pipe, and weld a nipple onto the 3", then connect the stock tube to the new 3" pipe with a fuel line and have a working PCV system.
 
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