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It's a measurement the VI analyzer does. Something to quantitatively assess whether your VI is very modular or not. It looks at the number of subVI's used vs. the overall size of the program (by counting total number of nodes.) If you use enough subVI's, that means you likely have modular code, and will have a higher index. If you pack all your code in one large diagram and fail to use subVI's to break it down into smaller modules, then your modularity index will be approaching zero.
