There are 20 possible damage intervals in a hit. A damage base is added to whatever damage interval is rolled. Every mob can only do 20 possible damage variations. ATK vs AC increases the number of damage intervals that are lower. AC does the opposite and decreases the number of high damage intervals. The more ATK you have the less effective the AC is of your target increasing your average damage per hit and vice versa. Parry/Dodge/Repost/Miss check happens before damage is calculated and has nothing to do with ATK.
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