Here is my filter system, and my air supply line from air compressor is 3/4” to first inlet of filter system then all 1/2” fittings to motor guard filter then a 6’ Airline to plasma cutter. I have never had an air issue or water issue with this air set up and I have auto drain valve solenoid on air compressor that opens for 10 seconds every 20 minutes.
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I like the caulk gun holder. Where did you get it? 
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thank you y’all for all your help as always. i rand out and got a whole new dryer (3/8) and hoses . i know its not idea but it will limp me through .
thanks again
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the 3/8 was what the min was in my manual .
I couldn’t agree more, because if I did it would start to get weird.
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