>I have included foxtools.fll into the project as part of the executable but when I run the exe, it tells me api library not found. So I manually copied the file to the default dir where the executable is and it worked? Is this necessary?

It simply needs to be somewhere that the executable can find it. IOW, either in the default startup directory or somewhere on the fox path. The applies, of course, only if you're simply referring to it by filename and not the fully qualified path of the file.