A DLL (dynamic link library) is a collection of small program functions. These small programs can then be used by other larger applications simultaneously.
For example, a business has an Accounting application. The developers who created this accounting package did not wish to write a complex currency conversion function, so they gained permission to use another companies conversion function, which is stored within a DLL.
The accounting application simply calls the relevant function within the DLL with a set of parameters (E.g from currency, from value, to currency) and receives the output (E.g converted value).
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