Lua create function with upvalues C

Is not very clear what you're trying to do. If you want to push C-closure fvalues with 2 upvalues, then:

int
main(int argc, char *argv[])
{
    ...
    lua_pushstring(L, "Hello, World!");
    lua_pushnumber(L, 3.14);
    lua_pushcclosure(L, fvalues, 2);
    lua_setglobal(L, "fvalues");
    ...
}

static int
fvalues(lua_State *L)
{
    printf("%s\n", lua_tostring(L, lua_upvalueindex(1)); // Hello, World!
    printf("%g\n", lua_tonumber(L, lua_upvalueindex(2)); // 3.14
    return 0;
}

Closure is created by passing lua_CFunction and values at top of the stack to lua_pushcclosure. Body of that function has nothing to do with creation of upvalues, it only can use them via lua_upvalueindex(n).

The pattern is something like:

int fvalues (lua_State *L) {
    ... get function arguments with lua_to* functions ...
    ... get upvalues with lua_getupvalue and lua_upvalueindex and lua_to* functions ...
    ... use arguments and upvalues ...
}

int callFValues(lua_State *L) {
    const char* cstr = "This_is_a_test";
    // push two values that will be upvalues of fvalues
    lua_pushstring(L, cstr);
    lua_pushstring(L, cstr);
    // create closure using the two upvalues:
    lua_pushcclosure(L, &fvalues, 2);
    // call it: 
    lua_pcall(L, 0,0,0);
    return 1; 
}

Then register callFValues. If you want to return a closure (as is common in Lua script), for use by your Lua script, pretty much same:

int createClosure(lua_State *L) {
    const char* cstr = "This_is_a_test";
    // push two values that will be upvalues of fvalues
    lua_pushstring(L, cstr);
    lua_pushstring(L, cstr);
    // create closure using the two upvalues:
    lua_pushcclosure(L, &fvalues, 2);
    return 1; // return it to caller
}

Then register createClosure, call it from script as fval = createClosure() then fval is a closure of fvalues with the two upvalues created by createClosure.

Read section 27.3.3 of PIL for detailed example. But in your code, your fvalues, which is a lua_CFunction you want to close and call, is itself creating a closure of itself, this makes my head spin :) Also,

lua_pushstring(L, cstr);
lua_pushcclosure(L, &fvalues, 1);
lua_pushstring(L, cstr);
lua_pushcclosure(L, &fvalues, 2);

creates a closure for fvalues with the first string added to stack being its one unique upvalue; this removes the string from stack, and puts closure on stack; then you push another string, and create another closure of fvalues, this time with 2 upvalues: the first upvalue is the first closure created, the second one is the second string added. My head spins even more. Hopefully with the PIL section and the pattern I show you have clearer picture.