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I was using a web-service which accepts xml input, but when i use 
 for new line it is rejecting the input saying dtd validation error. But when i use it is accepting. But from docs of web-service i see that they suggest us to use 
.
Which is the correct format?
No they are the same. The numbers after the
&#is the codepoint and can be specified in decimal form (as in your case) with or without leading zeroes, or in hexadecimal form&#xNNNN.Read more about Character and Entity References.