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The build checkout directory is a directory on the TeamCity agent machine where all of the sources of all builds are checked out into. If you use the agent-side checkout mode, the build agent checks out the sources into this directory before the build. In case you use the server-side checkout mode, the TeamCity server sends  incremental patches to the agent to update only the files changed since the last build in the given checkout directory; with the Do not check out files automatically mode, no sources will be checked out , and the directory will not be cleaned as described below.