What is interesting to me is that no w123 car ive ever owned has ever come to me with red ATF in the PS.

PSF is likely undyed ATF, but I've just never seen ATF in use in w123s!

I don't really care one way or another, and PSF works, as I'm sure ATF does too. ATF does have the benefit of many synthetic variants...

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Current Diesels:
1981 240D (73K)
1982 300CD (169k)
1985 190D (169k)
1991 350SD (116k)
1991 350SD (206k)
1991 300D (228k)
2008 ML320 CDI (199k)
1996 Dodge Ram CTD (442k)
1996 Dodge Ram CTD (267k)

Past Diesels:
1983 300D (228K), 1985 300D (233K), 1993 300D 2.5T (338k), 1993 300SD (291k)