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What’s the difference between the plastic base (DN3) and the all-steel needles (DN1) used in the Dennison gun (DG1)?

They are both used and function the same in the Mark III Dennison gun. The all-steel needles tend to be sturdier and will typically last longer before breaking. The plastic base is a more economical version of the same needle. Some also feel that opening in the plastic base needle provides a smoother passage for the fasteners to enter through, thus there is less jamming of fasteners.