Intake threads are female, need a male threaded fitting
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does that mean that mag-drives are submersible and external pumps.
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Yep, can be used either way.
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which way is better to use it
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Hypothethetically external will provide less heat to the water, but I think Mag-Drives are water cooled no matter which way you use them. I would look at space requirements of the sump and which was easiest to plump and make the decision from there.