You can attach your External References file as an attachment or as an overlay, and the option for selecting the type of your XRef is in the Reference Type panel, as shown in Figure 9.9:

• Attachment:

When you select an attachment for an XRef, the file gets nested the next time you attach the host file. To explain this, let's assume you are attaching file B as an XRef in file A. Later, when you decide to attach file A to another drawing as an XRef, then file A, as well as its attached XRef B, will be added to the host file because you selected Attachment as the reference type for file B.

• Overlay:

When you select Overlay in the reference type, the file is attached as an overlay, and when you attach the host file in another drawing, its nested references are not added. To explain this clearly, let's use the analogy we used earlier. When you attach file B as an XRef and use Overlay for the reference type in file A and later attach file A in another drawing as an XRef, then only the contents of file A will be added, and the overlaid XRef will not be inserted in the host drawing.

So, in a nutshell, the Attachment option allows you to add an XRef as well as its nested reference files, whereas Overlay only allows you to add the top-level XRef and ignores all the nested XRefs in the drawing. When you want to add drawings as XRefs, then you can select Overlay as your default option if you want to avoid the issue of circular or nested references.

Now that you know what all the options in the Attach External References window mean, it's time to explore other External References tools.