>>The safest thing I've found so far is to distribute a copy of foxtools.fll to the directory where your .exe is - though it may be anywhere on the DOS path, it's safer to keep it on app's dir, in case more apps are installed, using different versions of VFP (and FoxTools).
>>The errors you may get if you run one version of runtime with a wrong version of foxtools may be very confusing and generally a waste of time.
>
>The technical reason, I believe, is that an FLL is a DLL - albeit one that is designed to work only with VFP. And the functions in the DLL are not run by VFP directly, I think.

It's a special dll - from what I remember from FPW2.5/2.6 (which is when the .fll was introduced), it has a special mechanism of passing the VFP-type values and variables, which makes it entirely different.
Basically, it's a .dll which you can't use outside of Fox, unless you are ready to employ this specific mechanism.

"Run by VFP directly" is, well, sort of true. VFP has the internal mechanism to connect to .fll functions, and since you can use the functions defined inside it as if they were internal Fox functions (and you could do that even before Declare Dll was introduced) - my opinion would be that they really are run by VFP.