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The Transfer VM is virtual appliance that is shipped with XenServer (since 6.0) and can be used to export/import disks over a variety of protocols.
The VM itself is used by the transfer plugin. This is an XAPI Plugin which is installed in Dom0, and presents the caller with and API for exposing VMs, and disks.
The caller, is then able to upload or download disks in a number of formats - depending on the configuration associated with the expose call.