I think that so long as you reference the external works you used to write your own work (be it a report, essay, story, what have you), you should be fine. My university was very strict when it came to plagiarism and if you were caught, the least you'd risk is repeating the whole year if you were under exam conditions. I find it ok so long as you don't downright copy the external work and if you do, put it in proper citations or quotes and reference it and give it proper credit. Otherwise, it's not your work at all.
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