I thought he was talking about functions defined within the same file or some such.

Like:

    int square(int x) {
        return x*x;
    }
    int sum_of_squares(int x, int y) {
        return square(x)+square(y);
    }

And then the compiler could just know to turn that into

    int sum_of_squares(int x, int y) {
        return x*x + y*y;
    }

(apologies if my syntax is invalid; I'm not actually a C programmer)