What does the SET statement do in a DATA step?

The SET statement in a DATA step is specifically used to read an existing dataset into the DATA step for further processing. When the SET statement is executed, SAS takes the dataset specified and brings its observations into the current DATA step. Each observation of the input dataset is read one at a time, and the variables in the dataset become accessible as variables in the DATA step.

This is foundational in SAS programming because it allows you to manipulate the data, create new variables, or perform calculations using the values from the existing dataset. With the SET statement, it is possible to read from one or more datasets and make modifications or create a new dataset as the output of the DATA step.

Other options, such as creating a new dataset or processing it for reporting, describe what can be done after utilizing the SET statement rather than the function of the SET statement itself. Assigning variable values from external files is more aligned with input statements like INFILE and INPUT, which handle data coming from external sources rather than datasets already in the SAS environment.