The closer the better. I am no expert yet, but I just recently got a crash course on setting up a drum chipper from a trustworthy friend. First, a good cutter bar is just important as good blades. The cutter bar should be reversable twice. you should get 4 good edges out of 1 bar. The bars will wear down in the middle. There should be an angled piece directly under the drum that the brush will slide up on. Eyeball the cutter bar setting so the material comming thru just hits the top corner of cutter bar.(if the cutter bar is too high, the brush will hit the side of the bar) Set one blade as close to bar as you can without touching it. Set the rest of the blades to match the first one. Do yourself a favor and use plenty of anti seize. That is a grease like material put on threads to prevent rusting. And of course make sure everything is clean as you reassemble.Good luck. let us know if this helps.