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This is a Snap function which snaps to the nearest point Nearest Point button on the entity below the cursor unless that nearest point is one of the other Snaps eg. an End point.

This is useful when drawing to an approximate position in an entity, such as an arrow head I(for a label) touching a line.

Nearest point- will be selected if the Nearest Point snap symbol symbol is displayed. If Snap Captions are switched ON the word 'Near' will be displayed next to the cursor. This is the only snap that can be turned ON/OFF using the Nearest Point button button.