Linking and Embedding Objects in the Product
A linked object is a document that can be viewed from its container application, but it actually exists in its source application. An embedded object is a document that actually becomes part of the container application. When using OLE Container, MicroStation is the container application. To link or embed an object to a DGN file, both the source application and MicroStation must be installed on the same system.
When you want to include the same information in several different DGN files, you should use linking. After you modify a link's source file, you can update linked objects in the DGN files as needed to reflect the modification to the source file.
When the information in the object pertains only to one DGN file, you should use embedding. Although editing an embedded object opens the document in the source application, changes made to the embedded object are only saved in the DGN file in which it is embedded.