Nail sets exist for one main reason: set nails. When you need to drive finish nails into trim or other areas that need a clean, attractive surface, you don’t want to risk denting or otherwise destroying the trim by bashing a hammer into it.
Most finish nails have small dents in the heads, which allow for the point of a nail set. You then hit the butt of the nail set with your hammer, successfully driving the nail into the trim. Nail sets are to drive finish nails flush with the wood or below the wood (the hole is then filled with putty).
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