incl_f1.c:

volatile char i;
void main(void) {
  i = 5;
#include "incl_f2.c"
  i++;
}

incl_f2.c:

i--;
i = i * 5;

relevant part of the resulting .lst file:

                            125 ;	incl_f1.c:3: i = 5;
                            126 ;	genAssign
   0005 75*00 05            127 	mov	_i,#0x05
                            128 ;	incl_f2.c:1: i--;
                            129 ;	genMinus
                            130 ;	genMinusDec
   0008 15*00               131 	dec	_i
                            132 ;	incl_f2.c:2: i = i * 5;
                            133 ;	genMult
                            134 ;	genMultOneByte
   000A E5*00               135 	mov	a,_i
   000C 75 F0 05            136 	mov	b,#0x05
   000F A4                  137 	mul	ab
   0010 F5*00               138 	mov	_i,a
                            139 ;	incl_f1.c:5: i++;
                            140 ;	genPlus
                            141 ;	genPlusIncr
   0012 05*00               142 	inc	_i

For me, it is CRYSTAL CLEAR what and where has been included.

JW


PS. Note there is NO linking involved in INCLUDE!