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Why do you want your function to be reentrant anyway?

"using a dis-assembler, i tried viewing that particular external RAM segment ... i found it to be loaded with the desired contents"

Pardon?
You can't disassemble a data segment!!

"all the automatic variables , used by the reentrant function gets memory space in the VIRTUAL STACK SEGMENT"

Yes, that is the whole point!
But if you want to know precisely what your implementation is doing, you must read the manual for that implementation!

You still haven't said what compiler you're using.