[cisco-nas] Fragmentation & MTU

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I am trying to figure out what the real difference is between 
frame-relay fragmentation and setting the MTU on an interface.  If I 
have a frame connection and I set fragmentation to 500, it will fragment 
the packets.  If I set the MTU to 500, it will also fragment the 
packets.  I'm guessing the difference is that Fragmentation is layer2, 
whereas MTU is layer3.  Is that correct?  Also, what about the affects 
on QoS?  If I setup LLQ outbound on the frame interface, I know 
fragmentation takes place before the LLQ queueing, but what about if I 
set the MTU.  Will that take place before queueing or is it after and 
therefore somewhat worthless from a QoS perspective?  Thanks.

Peder