Can a paladin's Detect Evil ability detect if there is Evil in the area, as per the spell, or is it target-only?
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From the Core rules pdf (pg 60):
In the Detect Evil spell it lists a Cone shaped area effect. So my reading of that is that the paladin can do either but not both at the same time. For example a paladin could be talking to three npc's and use the area effect to see if any of them are evil and then after that move is completed on their next movement action focus on one individual to get a full aura reading but then he would stop detecting evil in the area and only focus on that one npc.
Of course it doesn't seem totally clear cut from the rules explanation so individual players/DM may interpret the rule differently.
The description on page 60 of the core rules suggests that it does both.