You'll get the Two-factor settings in Settings > Plugins > Two-factor.
To setup SMS authentication, please follow this steps to setup Twilio API.
Sign up to your Twilio account.
Continue like this.
Then go to Twilio console.
Go to Phone Numbers > Manage > Buy a number.
Please select SMS from filter.
After that, go to console page again.
Get the credentials and add to Settings > Plugins > Two-factor page.
You can send a test SMS now to test the integration.