docker and docker-compose seem to be interacting with the same dockerFile, what is the difference between the two tools?
For using Docker Compose on Windows, we need to just have Docker Desktop for Windows installed and don't need to install Docker Compose separately.
A Dockerfile is a simple text file that contains the commands a user could call to assemble an image whereas Docker Compose is a tool for defining and running multi-container Docker applications. Docker Compose define the services that make up your app in docker-compose.
The docker cli is used when managing individual containers on a docker engine. It is the client command line to access the docker daemon api.
The docker-compose cli can be used to manage a multi-container application. It also moves many of the options you would enter on the docker run cli into the docker-compose.yml file for easier reuse. It works as a front end "script" on top of the same docker api used by docker, so you can do everything docker-compose does with docker commands and a lot of shell scripting. See this documentation on docker-compose for more details.
Update for Swarm Mode
Since this answer was posted, docker has added a second use of docker-compose.yml files. Starting with the version 3 yml format and docker 1.13, you can use the yml with docker-compose and also to define a stack in docker's swarm mode. To do the latter you need to use docker stack deploy -c docker-compose.yml $stack_name instead of docker-compose up and then manage the stack with docker commands instead of docker-compose commands. The mapping is a one for one between the two uses:
For more details on swarm mode, see docker's swarm mode documentation.
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