In Word's mail merge terminology, a Directory is a list or report. Where mail merge letters create a separate letter for each record, and mail merge labels create a new label for each record, a directory creates a continuous list for each record.
The Directory option is great for printing out an address book, phone list, list of customers, etc. Any time you want to print fields from a data source as a list or form without page breaks between records, choose Directory in the Select document type list in Step 1 of the Mail Merge task pane.
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