Dunno what the deal is with the dump valve, althogh if you have a non piston type and it's knackered i know it can lead to problems with idle/stalling due to an air leak.
your dump valve should sit somewhere between the exit form the intercooler and the inlet manifold, and the small vacuum hose generally goes to a vacuum pipe leading from one of the point on top of the inlet manifold.
Piston type dump vavle is the only type to run if you're on MFI as diaphragm type causes the above mentioned problems. Bailey sell them and i think forge do too.
HTH>
Mark.