On Windows Server 2003 R2, the staging area is contained within a folder under the replicated folder itself. Basically, there is a hidden sub-folder called ‘DfsrPrivate’ under the root of every replicated folder.
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On Windows Server 2008, the ‘DfsrPrivate’ directory has been moved under the ‘System Volume Information’ folder on the same volume.
Source : blogs.technet.com/filecab