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In CFML, # is used to mark the start and end of a ColdFusion variable or expression so as to distinguish it from strings. So, in a block between <CFOUTPUT> and </CFOUTPUT> (which is essentially a big string), all variables and expressions must be enclosed in between # characters. However, within tags, data is assumed to be variables and expressions and not strings, and so <CFSET x=y+1> does not need # characters around x and y. The rule simply is, only use # characters where ColdFusion assumes that data is a string.
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