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If I recall correctly, a nested interrupt handler allows a higher-priority interrupt to interrupt it. For example, you might want a timer interrupt to have higher priority than a UART interrupt, because what you are doing in the timer requires hard real-time guarantees on latency. In this model, an interrupt cannot interrupt the handler for itself.In a re-entrant interrupt routine, a second interrupt of the same type can interrupt processing of the first one. This is rarer, because if the interrupt is that important, you probably need to service the first one anyway. Re-entrant code is more difficult to write and debug, since it will often require access to the same data structures as the interrupted interrupt handler. It also allows unbounded stack growth if the interrupts come in too fast to handle.