Axym has the right idea, but his explanation stops short of explaining where the three mutually perpendicular planes are. This is also where the current standard comes up short. You must show on the drawing where the origins of measurement are, and also which degrees of freedom the compound-primary datum A-B is eliminating if you are planning on using secondary and tertiary datums as well.
Thinking about it logically; if the workpiece is engaged/held on Datum Feature A and Datum Feature B simultaneously, then the part cannot move in space; all degrees of freedom are eliminated. The only remaining question is then where to take the measurements from. The designer (hopefully in consultation with the inspector) decides & marks this on the drawing. This can be any convenient location in space as long as it is related back to the datum features by basic dimensions. Before anyone asks, no this is not shown in the standard; it is extensions of fundamental principles.
Consider a compound datum composed of 7 planar & parallel features at different elevations; this is legal per the standard (Fig. 4-20; 4.5.7.1 Simulation of a Single Datum Plane). Here, unfortunately, the standard doesn't tell you explicitly how to deal with more than two datum features. As defined in the standard, you actually measure from the datum simulator, not from a theoretical plane (the datum). Which of those 7 simulator surfaces do you measure from? Does it actually have to be from any of those 7? The standard doesn't say anything more than you measure from the simulator. Thus, any repeatable feature on the simulator, including an offset that is traceable back to the original simulator surface(s), is acceptable.
Consider also 4.4.1.1 Parts With Inclined Datum Features; (Fig. 4-4), the datum is not on the workpiece, but it is traceable back to the datum features by means of basic dimensions.
Throw in 4.5.10.1 Mathematically Defined Surfaces; again, the actual datum feature surface won't make contact with the datum simulator, however you will measure from the datum simulator.
It's a long way around, but that is how advanced GD&T applications are derived from Y14.5.
There is a valid argument for using the compound datum method if the pipe is rigidly affixed at both ends (i.e. welded or rigidly clamped). Otherwise, I would tend to use datum targets instead.
DesignBiz, to be correct conical datum features are not features of size, they are just datum features.
Jim Sykes, P.Eng, GDTP-S
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