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When full pathnames are not supplied, the various Windows functions look for files and directories in the current directory of the current drive


Cover of Windows® via C/C++, 5th Edition


I.e. that the "current directory" for a process is simply the point to which all paths are relative. If the Current Driectory is c:\programs\myapp\bin then the relative file ..\config.xml lives in c:\programs\myapp\config.xml.