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When the hook is called in the PHP script, it basically runs calls all plugins using that hook to run?

So If there was a hook in place before a PM was sent, say, and I had a plugin that hooked into that, the plugin would run right before the PM was sent right?

I'm just curious (inb4 wiki) as I might learn how to make plugins in the future.

Yes, your are correct.

Cool, thanks for the clarification