To adjust the clutch on your FXE, loosen the lock nut on the cable adjuster on the left side of the seat post of the frame. Turn the adjuster in as far as it will go.
Now, remove the derby cover and loosen the lock nut on the clutch release pushrod adjuster in the center of the clutch assembly. Adjust the push rod release until the clutch release arm is as close to the starter as possible then back it up until it's just about an 1/8 to a 1/4" away from the starter. Lock the lock nut down and re-install the derby cover.
Now, at the cable adjuster, adjust the adjuster out until you get about an 1/8" free-play at the lever. This should get you a good release of the clutch.
The important thing is that you must have a bit of freeplay in the clutch lever. Otherwise, your throwout bearing will be against the pushrod constantly and will fail resulting you not being able to release the clutch. If this happens, you'll have to pull the clutch release cover off the right side of the transmission to replace the bearing. It's a little ***** thing about the size of nickle.
Before you put back your old derby cover check our selection derby cover so you can style up your bike.