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Trojans are malicious applications that pose themselves as legitimate software in order to trick users to install them. Once on the victim's machine, it may run any number of malicious process to steal vital information or inflict damage to other software.
When run, the Trojan installs itself to the system. While installing, the program downloads Trojans from a remote hacker's site and runs them. Optionally, it can install downloaded Trojans in the Windows registry to start automatically.