Local materials are stored within the DGN file itself rather than in external library files. Storing the materials in the DGN file allows for an element’s material definition to be handled in a manner that is more consistent with other element properties such as level, text style, and the like. For example, when an element is copied from a reference file, its level (if it does not already exist) is copied as well — it is never possible in normal operation for an element to lose its level. In a similar manner, with local materials, copying an element from a reference file causes its material definition also to be copied to the master file. By tightly binding a material to an element (or level), it is possible to insure that the object is always rendered with that material, thus helping to insure that rendering is more repeatable.
When local materials are used, created from external palettes, a material palette file is required only the first time that a material is applied. Once you have created a local material, the material definition is saved with the DGN file. You then can use that material in any models of the DGN without the need for external files (external material tables and material palette files).
When a material is imported, or a new material created, then a local material and a palette are created. In these cases, a material is created that has no association with an external definition. You can create external versions of these local materials from the Table menu in the Material Editor dialog.