As others have stated the disk you need to boot from is the "Disk Tools" disk and all you need to do is have it in the drive while the computer is booting. The floppy drive is the first boot device. If the computer cannot boot from the floppy it will kick it out or display a message on the screen.

If you are able to boot from the "Disk Tools" disk, the program you are looking for is either "Apple HD SC Setup" or "Drive Setup" depending on the version of your "Disk Tools" floppy.

With the computer booted up from the HD, does the "Disk Tools" floppy show up on the desktop when inserted?