American Dictionary of the English Language

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INLA'Y, verb transitive preterit tense and participle passive inlaid. [in and lay.]

To veneer; to diversify cabinet or other work by laying in and fastening with glue, thin slices or leaves of fine wood, on a ground of common wood. This is used in making compartments.

IN'LAY, noun Matter or pieces of wood inlaid, or prepared for inlaying.