I have a mystery. I've looked at wiring diagrams until my eyes have crossed and I can only assume this stray wire in my headlight bucket is for a headlight on/off switch that didn't exist in Canada because we have daytime running lights laws. It's a 1980 DT100, and everything works. Lights, gauge lights, everything. I could just leave it alone but this stupid blue wire is staring me in the face every time I open the bucket.

Picture of the errant wire:
imgur.com/a/0jMUlfX

Do you have a hi/lo switch?

I think its for an oil tank low level float switch if you have one fitted. Maybe a comon wire loom for various model of which not all run a float switch. My guess--ok i cannot lie--i googled haha.

I think I figured it out. Ran over the harness with a multimeter to test continuity and re-read the DT100D/E/F wiring diagrams. I think this is another Canada model oddity.

The gauge lighting was wired to the blue wire running to the headlight. According to every wiring diagram I can find that wire should be wired to the mysterious Blue/White wire, which also runs to the tail light. None of them show a double socketed connector for the headlight to allow this.

So either the previous owner expertly wired up a double bullet socket connector (it looks totally stock) or Yamaha wired these up a bit differently per country. Maybe because of daytime running light laws. In it's current state the gauge lights up when the engine & headlight are running, plugged into the mystery wire it lights up when the key is turned on, regardless of the engine. I like it lit all the time, like the tail light, so I'm using the mystery wire.

Yamaha generally wired the the gauge lights to be on only with engine running.

My guess is that wire is for a "city light" that we didn't have in North America, basically a small secondary light bulb in the headlight that comes on with taillight with engine off.  

The smaller bikes were slower to get then-expensive updates like CDI and voltage regulators.  Since you're modifying the wiring to reduce the load on the AC headlight circuit, it would be a good idea to make sure you have a Yamaha AC voltage regulator installed.  Otherwise you are upsetting the "balance" and headlight may burn out prematurely due to the reduction in load and resulting higher headlight circuit voltage.  

"My guess is that wire is for a "city light" that we didn't have in North America, basically a small secondary light bulb in the headlight that comes on with taillight with engine off."

Could be. If it is, I would expect it to be blue with a red stripe, and originating from the ignition switch.

My experience of blue/white wires on Yamahas of that era is that they are for the electric start, not a lighting circuit. 

IMGUR has been switched off in the UK, so I can't view any photos!

This wire is definitely connected to the tail light. The city light idea is a good one, and better than my explanation. Makes sense too because I believe I remember seeing that the Malaysian DT100s I see online have the small light inside the headlight. I guess the international wire harness included something to cover every country.