Just find the itemfinder press A and select 'use' then you're using it!
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In Generation I (Red, Blue and Yellow), the itemfinder is obtained from Oak's aide in building at Route 11. You must have caught at least 30 different Pokemon before he will give it to you.
Use the itemfinder.
Use the itemfinder where Mr. Fuji was in the Pokemon Tower.
Youuse it to find hidden items.
use the itemfinder and you can find plenty.