So yesterday I was replacing glow plugs on #4 and #5 of my car (light still doesnt come on but car starts like a champ now)... and lo and behold there is some kind of plug in between 2 and 3 cylinders.... Attached are pics... Is this the tach sensor?

Attached Thumbnails

   

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1995 E420 Schwarz
1995 E300 Weiss
#1987 300D Sturmmachine
#1991 300D Nearly Perfect
#1994 E320 Cabriolet
#1995 E320 Touring
#1985 300D Sedan
OBK #42

Not sure which car this is but the tach sensor in near the crank pulley on early 80s Diesels and near the flywheel on mid-later 80s Diesels.

Sixto
93 300SD

The thing you're pointing out in your picture is the coolant temperature sensor for the gauge on the dash. The tachometer sensor is down front by the crank pulley as sixto said.

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That is the cylinder head temp sensor. It drives the temp gauge on the instrument cluster.

The tach sensor is on the crank pulley and has a thick white wire going up to the passenger fender by the glowplug relay.