not sure if Dig installs the same as Toro but on the Toro drip system the pressure regulator goes before the filter. If your parts will assemble that way you might want to give it a try.

I was thinking the same thing... that the pressure regulator comes before the filter.

Looking at the generic design at www.irrigationtutorials.com, that's what they show...

Back flow preventer first
Regulator second
filter third

As for the lack of tight fit, it sounds like a hose v. pipe thread situation. There's two different types of threads, there's pipe threads and hose threads. The pipe threads are tighter spaces together, but on equal pipe/hose sizes, they are close enought that you can get one started on the other. It's quite possible that the controller, backflow preventor, and one side of the pressure regulator are using hose threads and the filter and other side of the regulator use pipe threads (so if things were installed in the correct order, the threads would line up). Of course the other possibility is that your filter is designed for pipe and everything else is hose (if these parts were not purchased as a kit).

I only use teflon tape on threaded pipe fittings. One place you see a treads on drip is if you use the pressure regulator that has 3/4 male pipe threads. they also make a fitting that is very simular but has male hose threads (with a hose gasket). very easy to use the wrong fitting threads.