There is no such thing as a dumb question.
The variables directory is probably your cgi directory. It should contain several files that begin with vars_ and end with .cgi.
You can check which directory is your variable files directory by logging into your control panel and opening the Configuration Settings. It is listed there.
NOTE: Take great care with your variable files since they contain all your community's settings. If they are deleted or replaced with default files it may stop working or would reset your community to new installation conditions!