The modulator is on the drives side middle of the transmission. plastic, green in color, remove the black rubber cover cap, behind it you will find the steel T handle pull it out enough to turn it CW. make sure the T seats between the opening on the modulator,intall the rubber cap.
To fix a 2nd to 3rd Flare up shift install the K1 spring kit
http://www.peachparts.com/shopforum/showthread.php?p=1270679&highlight=Spring+kit#post1270679