Nested templates are a relatively new feature in ARM templates compared to external linked templates.
Nested templates do not define resources in external files. The resources are defined within the caller template itself and within the deployments resource, as shown here:
"resources": [
{
"apiVersion": "2017-05-10",
"name": "nestedTemplate",
"type": "Microsoft.Resources/deployments",
"properties": {
"mode": "Incremental",
"template": {
"$schema": "https://schema.management.azure.com/schemas/2015-
01-01/deploymentTemplate.json#",
"contentVersion": "1.0.0.0",
"resources": [
{
"type": "Microsoft.Storage/storageAccounts...