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FAQ What is the use of the build.xml file?
The build.xml file is an Ant script that is created by the PDE to take your plug-in components and combine them into a deployable format. This file compiles and archives your plug-in source code into a single JAR file. The build.properties file controls what goes into your plug-in distribution.
The build.xml file can be created by using the context menu on plugin.xml and selecting PDE Tools > Create Ant Build File.
Ant build files are low-level mechanisms to package up plug-ins. A much easier way to share and deploy plug-ins is to create a feature for your plug-in and then an update site. The Update Site Editor has a very handy button, Build All..., that will create the build.xml behind the scenes, run it, and collect all the output without cluttering your plug-in and feature projects.