Genetic engineering involves manipulating DNA for practical applications such as DNA sequencing, creating transgenic organisms, and DNA fingerprinting. Key genetic engineering tools include PCR to make copies of DNA, restriction enzymes to cut DNA into fragments, and plasmids to replicate recombinant DNA containing genes from different sources. Gel electrophoresis is used to separate DNA fragments by size, allowing analysis for applications like DNA fingerprinting, paternity testing, and determining which organisms are transgenic. Cloning creates genetically identical organisms like Dolly the sheep through transferring donor cell nuclei into egg cells.