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ALTSEQ has two general uses: (1) change the normal sort EBCIDIC srt sequence to something else. Thus if you want (the manual's example) to change the sequence so that the symbol for dollar sign ($) sorts after upper case Z, you would code code ALTSEQ CODE=(5BEA). This literally means "place '5B' in front of 'EA'. The second useage is to translate a hex code for another. For example if I wanted to translate hex '00' to spaces ( hex '40') I would code ALTSEQ CODE=(0040) and use the TRAN=ALTSEQ in the OUREC statement. Check out Z/OS DFSORT Application Programming Guide p.90 and thereabouts.
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