I have checked the cluster diag and can get all gauges to move and work. My question is there is no speed sensor in the transfer case only a metal plug where one would go. Is there a another sensor mounted in the transmission for the speedometer? and if so where would it be located. tia

On late production '01's the speed signal comes from the ABS Unit and is derived from the wheel sensors. There's no VSS in the tranny.

check wheel speed sensors with scan tool and they all show they are reading and working. did a dash diag and all the needles move.

Then the speed info isn't making it from the ABS to the cluster. There may be a problem in the ABS, many internal codes will make them stop transmitting the vehicle speed signal. You'll need to get the ABS scanned if your tool won't do ABS DTC's. If it does and there aren't any codes, then you may need a scanner that can read the cluster.