TUpdateSQL uses the DataSet property for two purposes: 

It fetches the original and updated field values from this dataset when performing parameter substitution. 

If this dataset is a TDBDataSet descendant, it uses its DatabaseName and SessionName properties to identify the database and session that it uses when performing its update queries. 

If you are using a single update object, then the DataSet property is set automatically when you set the source dataset's UpdateObject property. 

If you are using multiple update objects, you must set the DataSet property at runtime in a BeforeUpdateRecord or OnUpdateRecord event handler. If you are using the source dataset to cache its own updates, set DataSet to the source dataset in an OnUpdateRecord event handler. If you are using a client dataset to cache updates, set DataSet to the DeltaDS parameter of the BeforeUpdateRecord event handler. 

UpdateObject 

TDBDataSet 

OnUpdateRecord 

BeforeUpdateRecord 

Using Multiple Update Objects