An 'application database' is a database that is part of an application.
SQL Server is a database.
MSDE (Microsoft SQL Server Desktop Edition) is a database.
Microsoft Access is an application database. The database comes with the application.
You can develop an application that uses MSDE. When you supply someone with your application, you also supply the database and both are installed at one time. That's an application database. It's only for that application.
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