Originally Posted by Neapolitan

The neck pick-up is near the neck. The bridge pick-up is near the bridge. The middle pick-up is in between the neck and bridge pick-ups.

You can find the sweet spot for your tone two ways. Either by having the volume at 10, and adjust the tone knob. Or by having the tone at 10 and adjust your volume. Strange as it might sound but once you back away from the 10 on your volume, you start to bleed off the higher frequencies, (it basically acts like a tone knob). Not having the volume on 10 leaves some head-room too. Say if you are jamming with a band and a volume war breaks out, you can turn up the volume using your vol. knob on your guitar.