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in general (a fast look at Wikipedia may save allot of time)
A user-defined function (UDF) is a function provided by the user of a program or environment, in a context where the usual assumption is that functions are built into the program or environment.Read More
and for the SQL part
Like functions in programming languages, SQL Server user-defined functions are routines that accept parameters, perform an action, such as a complex calculation, and return the result of that action as a value. The return value can either be a single scalar value or a result set.
