unknown directive "set" in .../nginx.conf

[Eugene Bragin]

Hello,

I'm trying to configure nginx to be working with memcached, as shown here:
http://wiki.codemongers.com/NginxHttpMemcachedModule

my server config looks like this:

--------------------------
...
        location / {
          set  $memcached_key  $uri;
          memcached_pass   localhost:11511;
          default_type     text/html;
          error_page       404 = /fallback;
        }
...

and it fails with:
unknown directive "set" in .../nginx.conf

Eugene.