I just changed the front pads on my '96 750 this summer. Remove that plug, 
as Kurt says, while the caliper is on the bike so you get good leverage. As 
the picture in the manual shows, it's just a dust plug. The real bolt is 
below it. That bolt/pin is the only thing holding the pads in, as it goes 
through the hole in the pads. The other pad ends go into the slot in the 
caliper, which is why the manual warns you (align) to make sure they get up 
in the slot.  

Once you remove that underlying pin, the brake pads will basically fall on 
the floor.

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