VMS Help MERGE, Output File Qualifiers, /OVERLAY, Full Description  *Conan The Librarian (sorry for the slow response - running on an old VAX)

    To specify that an empty file is to be overlaid with sorted
    records, use the /OVERLAY qualifier.

    If the input file organization is indexed-sequential, the output
    file must already exist and must be empty. If the output file
    is not empty, /OVERLAY does not write over the file. Instead, it
    appends the result of the sort to the existing output file.

    If the input file organization is sequential or relative, you can
    create an empty file for the sorted records using an OpenVMS RMS
    program and use the /OVERLAY qualifier to specify that the output
    file is to be overlaid.

    You can use the Create/FDL utility to create an empty data
    file; use the /OVERLAY qualifier to specify that Sort is to
    write output to that file. Any attributes that you specify when
    creating the empty file then become attributes of the Sort output
    file.

    See the OpenVMS Record Management Services Reference Manual for
    more information. You can also refer to this manual if you want
    to use the Convert utility to produce an indexed-sequential file
    on output.