This command rejects changes made to previously checked out files, i.e. your locally updated files, and retains the old files in the source control project.
Shortcut: Right click a checked out item in the project window, and select "Undo Check out" from the Context menu.
The Undo check out option can apply to the following items:
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Single files, click on the respective files (CTRL + click, for several)
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XML Spy project folders, click on the folders (CTRL + click, for several)