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'precomp' is short for 'precomposition'.
To "precompose" a set of layers is to compose/composite/render them together as a unit.
It is often very useful to precompose a set of layers together so that you can then use the result (the precomposition) as one item.
That precomposition can be used as the source for a layer in a composition. When this happens, the precomposition is "nested" in the containing composition. So, 'precomposition' and 'nested composition' are terms that often get used interchangeably.
For more information, see the "Nesting, precomposing, and pre-rendering" section of After Effects Help.
I highly recommend working your way through the "Getting started" materials linked to from the After Effects Help and Support page. We put a lot of free stuff for beginners up there.
thanks again Todd!!
yeah i have been working through the videos, and already watched that one re 'nest' etc but was not 100% clear on it!!
so a pre comp in a way is a separate file so to speak where i can work on separate layers ad then cut and paste into my 'main' comp?
makes it easier to work with several layers if separated as pre comps right?
A precomposition is not a separate file. It is a composition. You can have this composition "nested" inside another composition and treat the nested composition like any other layer.
thanks Todd!! this is much clearer now for thanks very much for the answers! :)