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Tasha's Cauldron of Everything (p. 119) includes a magic item called the all-purpose tool, whose description states the following:

This simple screwdriver can transform into a variety of tools; as an action, you can touch the item and transform it into any type of artisan's tool of your choice [...]

While holding this tool, you gain a bonus to the spell attack rolls and the saving throw DCs of your artificer spells. The bonus is determined by the tool's rarity.

When it states that you need to hold the tool to gain this benefit, does this also imply that I need to use it as my spellcasting focus as well? Or can I just hold it with one hand and use the other hand to hold another spellcasting focus, and still gain this benefit?

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You only need to be holding the tool. You can use a focus with your other hand.

You have quoted the relevant portion of the All-Purpose Tool description:

While holding this tool, you gain a bonus to the spell attack rolls and the saving throw DCs of your artificer spells.

As noted in this Q&A, the post-Tasha's artificer can handle their focus and material components with a single hand, allowing you to hold the All-Purpose Tool in your other hand, even if the spell has somatic components.

The artificer's focus counts as a material components. From the section Tools Required of the artificer class description:

You must have a spellcasting focus—specifically thieves’ tools or some kind of artisan’s tool—in hand when you cast any spell with this Spellcasting feature (meaning the spell has an ‘M’ component when you cast it).

The rules for material components state:

A spellcaster must have a hand free to access a spell's material components -- or to hold a spellcasting focus -- but it can be the same hand that he or she uses to perform somatic components.

All material and somatic components can be satisfied with the one hand that is holding the arcane focus, so the other hand is free to do whatever - including holding an All-Purpose Tool.

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You don’t need anything else. The artificer spellcasting rules state:

You must have a spell casting focus, specifically thieves’ tools or some kind of artisan’s tool - in hand when you cast any spell with this Spellcasting feature (meaning the spell has an “M” component when you cast it). You must be proficient with this tool to use it in this way.

The all-purpose tool states you can transform it into any artisan tool with an action, and you are proficient with that tool. Et voila, it suffices as your spellcasting focus. I think that’s the point of it! It also means you have a free hand for your chosen weapon.

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    \$\begingroup\$ Hello and welcome. You are right in what you say, but that's not what the OP was asking about. You should only post an answer when it actually answers the question. \$\endgroup\$
    – Mołot
    Jul 28 at 9:25
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    \$\begingroup\$ @Mołot This answer looks okay as something of a frame challenge. Their point is that this tool works just fine as a focus, so they wouldn’t need to hold their other focus in their other hand. My answer points out that it works just fine as described in the question, and this answer observes that the situation described in the question probably shouldn’t come up anyway. \$\endgroup\$ Jul 28 at 9:38

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