Obviously the plug screw is the first one tightened as the top cap screw threads into it and pulls everything together. Your explander/plug screw is basically falling out of the expander. Tighten it to the spec'd torque then put the top cap and screw on and adjust the headset. It constantly amazes me how confusing headsets are to so many people.
And once again this post should be in 'bicycle mechanics' NOT general discussion. C'mon people.