Tool use: model dynamically decides to call an external function mid-reasoning, gets the result, continues.

Tool use: model dynamically decides to call an external function mid-reasoning, gets the result, continues. RAG: retrieval is a preprocessing step — fetch relevant docs, inject into context, then generate. Tool use is dynamic and chainable; RAG is a single retrieval step. In a fund document processing system, agents use tool use to call financial data APIs and Step Functions for orchestration.