Okay, I took most of your advices and got to this point where I am sampling one signal to construct another and is working very nice and smooth without any jitter (which I also realized why it was happening in the first place).
Here is the working portion of the code I would like to use TMR1 in so that I can measure time between occurrances if possible:
Code:
Third:

     
     PULSIN Sig3,0,S1                ' Monitor for and measure Sig3
     ADCIN 1, Low_pot                ' Read Low Pot setting
        Low_adj = ABS(Low_pot-128)   ' Make pot adjustable from center
     
     IF Low_pot <128 then            ' If pot on left side then make
     Low_set= S1-(S1/(AR/Low_adj))   ' negative adjustment
     ENDIF
     
     IF Low_pot >=128 then           ' If pot on right side then make
     Low_set= S1+(S1/(AR/Low_adj))   ' positive adjustment
     ENDIF
     
     WHILE sig2=1: WEND              ' Wait for trigger signal
     PULSOUT Inj2, Low_set           ' Send output pulse =% of Sig3
                                     ' input signal
GOTO Third
This is my understanding of a way to use the TMR1; Wait for something to occur then set the CAPTURE flag (PIR1.2 in this case) and read the high and low timer bits, clear the flag. Wait for something else to occur and read the high and low timer bits again, clear the flag and get the difference of the two timer values for time elapsed! Seemed simple enough but if it worked I would not be asking for direction. So the question here, can the TMR be software controlled like I'm trying to do or am I restricted to rely on the CCP1 input pin for triggering?
Code:
Third:
       
         TMR1H = 0            ' Clear TMR1 high byte counter
         TMR1L = 0            ' Clear TMR1 low byte counter
         T1CON.0 = 1          ' Turn on TMR1
     
     PULSIN Sig3,0,S1                ' Monitor for and measure Sig3
        Capture1 = 1                 ' Set capture flag bit
        T1.HighByte = CCPR1H : T1.LowByte = CCPR1L
        Capture1 = 0                 ' Clear capture flag bit
     ADCIN 1, Low_pot                ' Read Low Pot setting
        Low_adj = ABS(Low_pot-128)   ' Make pot adjustable from center
     
     IF Low_pot <128 THEN            ' If pot on left side then make
     Low_set= S1-(S1/(AR/Low_adj))   ' negative adjustment
     ENDIF
     
     IF Low_pot >=128 THEN           ' If pot on right side then make
     Low_set= S1+(S1/(AR/Low_adj))   ' positive adjustment
     ENDIF
     
     WHILE Sig2=1: WEND              ' Wait for trigger signal
     PULSOUT Inj2, Low_set           ' Send output pulse =% of Sig3
                                     ' input signal
        Capture1 = 1                 ' Set capture flag bit
        T2.HighByte = CCPR1H : T2.LowByte = CCPR1L
        Capture1 = 0                 ' Clear capture flag bit
     
     RPM = T2-T1
                 
    HIGH Inj4
    PAUSEUS RPM
    Low Inj4                                 
GOTO Third                           


END