The spring goes between the slotted head & the inside of the drop-out. The knurled nut screws onto the threads sticking out the rear of the drop-out. In other words, from front to rear: screw, spring, DO, knurled nut. (If the wheel needs to be far back in the DO, you can move the spring to the rear, between the nut & the drop-out, but there is rarely a need to do this.)