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In the context of Linq-to-SQL, Entity basically just means an object that can be stored in the database. Note that this term is sometimes used more narrowly, for example. in a domain controlled project.
An EntitySet represents an entity relationship to many other objects, whereas an EntityRef represents a relationship to one other entity. In other words, if you have a one-to-two relationship between two entity classes, one end will be represented by an EntitySet and the other by an EntityRef.
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