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So I know this isn't the best practice but is it possible to use both lists and data extensions in marketing cloud without any complications?

Use case could be like: I use lists when I want to send for specific kind of general audience but I use my master data extension when I want to filter the audience more specifically.

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Yes, very much possible.

Lists have limited functionality, so you will end up using Data Extensions but no issues using either or both of them.

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