Forget about where the sights and drum are for right now. All that means is you are likely to be somewhere on the paper at 100 yds. Your rifle is not yet sighted-in.
Sight the thing in at 25M. This will give you a 200 yd zero. Do this prone, and with a sling if you know how to use one. Use GI ball ammo.
We're going to do this in two steps. One for windage, and one for elevation.
Click up about 10 clicks or whatever you need to get on the paper.
Click up or down so the shot's roughly centered on the paper.
Now, center the rear sight for windage. If your POI=POA windage-wise you can forego the next step. If not, read on.
Next step is to use an allen wrench to loosen the front sight, and mechanically zero the rifle for windage. Move the front sight until the rifle is zeroed for windage, and sock it down but good. Scribe a line so that if the front sight should ever move, you can put it back in the right spot.
OK. At this point, your rifle should be on the paper, and the windage POI=POA. Now, adjust the peep up or down so that your elevation POI=POA. Once you've got that done, you should be hitting your POA smack on, with your rear sight's windage centered.
Once you have it zeroed at 25M, carefully click down the peep till it stops, counting the clicks. Write down the number of clicks. Now, go back UP the same number of clicks, loosen the screw, and turn the drum till the "200" mark is opposite the index mark. Don't let the aperture move; apply some lateral pressure to it.
If you goof up, no problem. You have your magic 200-yd zero's clicks-from-bottom written down, remember? Just start over.
Tighten the screw. Run the aperture all the way up, and press down with your thumb. If the peep doesn't move down, you've tightened at least enough. Tighten too much, and you won't be able to click the peep up or down with the knob at all.
If you've done this whole thing, and done it right, your rifle is now zeroed for all good quality GI milsurp. If you see a target at 600 yds, just dial up the peep to 600 and drop it. You also have maximum windage adjustment in both directions of travel, if you should ever need it. Barring damage to the rifle or sights, or a change from GI ball, you should never have to re-calibrate the sights again.
Oh, and one other thing. MAKE SURE to verify this at 200 yds ASAP, while all this is still fresh in your mind. The 25M business gets you very close, but nothing beats real-world confirmation.