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Possible Duplicate: How does Copy-local work? I have following situation: there's a project named OLAF.Tools, and that project references Microsoft.Data.SqlXml in C:\Program Files\SQLXML 4.0\bin\Microsoft.Data.SqlXml.dll. Reference Copy Local property is set to True. When I build that project in bin directory I can see both OLAF.Tools.dll and Microsoft.Data.SqlXml.dll there's a console application named OLAF.Generator, and that application references OLAF.Tools (I've added reference using Project tab). When I build that application in bin directory I can see only OLAF.Generator.exe and OLAF.Tools.dll - there's no Microsoft.Data.SqlXml.dll, what supprises me. Another wierd thing is that even though that dll is missing application is executing properly. So my questions are: why Microsoft.Data.SqlXml.dll is not copied to bin folder of OLAF.Generator console application? how application resolves directory where Microsoft.Data.SqlXml.dll can be found? Thanks,Pawel EDIT 1: (after response from Marc Gravell ) @Marc Gravell : Your answer gave me food for thought, as I could swore that I could always see indirectly dependant assemblies in main application's bin directory. And IMHO I don't agree with you - with all due respect :) Of course, references are not cascaded physically (we're are talking about strong relationship to classes, interfaces etc) - and it's exactly what I wanted to achieve when building OLAF.Tools library. That library provides a level of abstraction, it contains factories, and one factory accepts as a parameter string and returns interface. One particular implementation of that interface uses Microsoft.Data.SqlXml components. As a result, OLAF.Generator uses interface that is

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