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Instructions provided describe how to change the default location of newly created toolboxes and models. By default, when a new toolbox or model is created in ArcToolbox, either by way of ArcCatalog or ArcMap, it is created in the User Profile folder, C:\Documents and Settings\<User Profile>\Application Data\ESRI\ArcToolbox\My Toolboxes.
Follow these steps in either ArcMap or ArcCatalog to change the default location.