In simple terms, an inlay sits inside the tooth, an onlay sits on the tooth and covers the biting surface of the tooth and at least one cusp and an overlay sits on the tooth and covers both cusps and part of the lateral surface of the toothAn inlay is used when there is no damage to the cusp of the tooth, and the inlay can simply be placed right on the tooth. An overlay is used when the damage is a little more extensive. First, the decay will be removed from the tooth and a mold will be taken of the area and sent to a dental lab.