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Handling auto-complete search on server side?

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I'm having some trouble understanding how the datasource calls are handled on the server side. 

In this scenario i'd like to have the search box only request after either 3 letters are entered, or if the search button is pressed. I'm binding to my own datasource connecting to a BI layer. I don't quite understand how the onSearch event is fired both if the search is pressed, or if data changes in the box. What is the difference then when a user actually selects an item from the list? 

A code example would be helpful.


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