This sensor tells the computer engine rotation. But it’s a lot more than just a tachometer, it is souly responsible for three aspects of rotation:
•Revolutions per minute – engine speed and acceleration
•Cylinder identification – which cylinder needs spark and fuel next
•Crankshaft / Camshaft position – when valves are opened and closed

The stator is a “Hall Effect devise,” which uses a magnetic field. It sits under the distributor cap and picks up a signal from a wheel with teeth. The wheel has the same number of teeth as cylinders in the engine and moves at the same speed as the distributor and camshaft. If you have a V8 then the wheel has eight teeth; seven teeth are the same and one tooth is smaller to identify cylinder #1.

As the wheel spins with the distributor is breaks the magnetic field of the hall devise generating a sine wave. This sine wave is called the raw Profile Ignition Pickup (PIP) signal and indicates the engine status at 10°BTDC. Now some people think the TFI is responsible for this, but that is incorrect; the PIP signal passes threw the TFI unaltered to the computer.
This sensor is so accurate that cam changes can be a bad thing. The computer is programmed when to open fuel injectors in relation to the valve timing from PIP. Changing the valve timing with a cam swap won't be noticed by the computer. So optimal performance and idle will not be to their true potential.
As I've said on other pages this sensor is extremely important. Without it working properly the computer never senses the engine moving and the entire vehicle is a paper weight. If you have a distributor mounted TFI, it too can be the problem, because the PIP signal must pass through it to the computer. The stator and TFI both share the same grounds and power circuits, when one fails the other might be bad as well. It's a standard practice at dealerships and most quality repair shops to replace the TFI and stator at the same time. This prevents the problem from re-appearing a few weeks latter.

PIP signal at 1000RPM:

PIP signal at 3000RPM: