Target Parameters allow you to make an action list Target behave as a function of specific values when you call it.
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In the above example, the variables %SOURCEPATH% and %BUILDNUM% are available to any actions in the action list Target with these parameters.
To run an Target, use a "Run Target" action (available in the "Flow Control" action types category). The Run Target action's property page allows you to specify the value of each action list Target parameter: