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"In digital circuit theory, combinatorial logic (also called combinational 
logic) is a type of logic circuit whose output is a function of only the 
present input. This is in contrast to sequential logic, in which the output 
depends not only on the present input but also on the history of the input.

In other words, sequential logic has memory while combinatorial logic does not.

Combinatorial logic is used in computer circuits to do boolean algebra on input 
signals and on stored data. Practical computer circuits normally contain a 
mixture of combinatorial and sequential logic. For example, the part of an 
arithmetic logic unit, or ALU, that does mathematical calculations is made from 
combinatorial logic, although the ALU is controlled by a sequencer that is made 
from sequential logic." -- http://en.wikipedia.org/wiki/Combinational_logic