The three holes allow you to slightly advance the valve timing to compensate for stretch in the timing chain over time. If the chain is brand new then obviously you would be using hole number one. And by the time its ready to be replaced you should already be on hole number three. The repair manual should tell you all this though and you should not be doing this kind of work without a manual. For early Datsuns like the 240Z I've always found the Haynes manuals to be very good.