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In the Splice Mode this button will grab the core or selection from the current track. In the splice mode, you can set the current track either by clicking with the middle mouse button, and thus setting a reference point, or by cmd-left moust click, setting an active track.
If the core button is selected, we will grab the core from around the startCut point you have selected.
If the selection button is selected, we will grab all of the track from the startCut point to the endCut point you have selected.
For information marking a cut, seeStart and End Cut