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Creating a network from a laptop?

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Hi Guys,

An old laptop recently came into my possession. It works fine but the hinges are broken, so I thought it would be a good idea to convert it to desktop use with a new monitor, keyboard and mouse.
Is there any way that this converted laptop (laptop 1)(which is wifi ready) can be both a wifi connection 'relay' to my brother's laptop (laptop 2) in the next room (that is outside the router's range) as well as a drive for files that he can access over a network connection? Laptop 1 has no connection via ethernet either to the internet or laptop 2.
I appreciate this may not be possible but if anyone has an idiot-proof guide to how to do it then I would be eternally grateful :)
Thanks for you time in advance


Btw both laptops run XP SP2
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