How to use binary data with XML?

[Roger L. Costello]

I have a few questions on using binary data (e.g., gif, jpeg images)
with XML.

(1)  Binary data isn't actually put in an XML file, correct? i.e., the
binary data is _not_ inline, correct?  An XML file just contains ASCII
text, correct?

(2)  Just like in HTML, binary data is _referenced_ by the XML document,
correct?

(3) Is this the correct way of using binary data:

DTD:

<!NOTATION jpeg PUBLIC "JPEG">
<!NOTATION gif PUBLIC "GIF">

<!ENTITY bostonGIF SYSTEM "http://www.maps.com/boston.gif" NDATA gif>
<!ENTITY bostonJPEG SYSTEM "http://www.maps.com/boston.jpeg" NDATA jpeg>

<!ELEMENT map (image)>
<!ELEMENT image EMPTY>
<!ATTLIST image
              src  ENTITY #REQUIRED
              desc CDATA  #IMPLIED>

XML:

<map>
    <image src="bostonGIF"
           desc="Map of Boston"/>
</map>

Here we see an XML document _referencing_ a file containg binary data. 
The binary data is not actually inline.  Is this how it's done?  /Roger

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