Most settings can be overridden by commands. Chanses are good that the default setting is OK, so start testing. Go to Panel on the Z88 and set Transmit and Receive baudrate to a value you know the modem can handle. In between can be one or more commands, upper or lower case, separated by spaces or not. Now you know if the Z88 and the modem can talk to each other.
D stands for dial.
M1 enables speaker on until an answering modem is detected. L2 enables medium volume. The first time you try dialing chose a number to an answering phone or a friend. In the example I use the number to the Liverpol Mailbox BBS which has a Special interest Z88 section. Paranthesis, hyphens and spaces are ignored.