Yes, the Help says:

"Visual FoxPro searches for a file in the default Visual FoxPro directory. The default directory is the one from which you start Visual FoxPro. However, you can specify a different default directory in your Visual FoxPro configuration file or in a startup program. If Visual FoxPro cannot find a file in the default directory, it then searches the Visual FoxPro path if one has been specified. Use SET PATH to specify the Visual FoxPro path."

And it is better to always use the relative path (depending on your directory structure), i.e :

SET PATH TO ..\DATA; ..\GRAPHICS, ..\OUTPUT

>OK, I will contiune to use SET DEFAULT when I am coding and SET PATH for the main.prg. From my understanding when the abc.exe runs, VFP looks in the default directory first (via, regardless if SET DEFAULT TO is issued or not), then where ever the SET PATH TO is next... Thanks!
>
>Chuck
>
>>>USE dirpath
>>>STORE dirpath TO dirpath
>>>SET PATH TO &dirpath
>>>USE
>>
>>IMHO, SET PATH is the preferrable way. Also there may be a combination of them: SET DEFAULT sets the start directory (for example, if it should be different from the directory where your EXE starts, or if you have multiple data sets) and SET PATH provides access to all necessary files.