diff --git a/README.md b/README.md
index 4f1b536..439e4ca 100644
--- a/README.md
+++ b/README.md
@@ -149,29 +149,46 @@ mcpctl apply -f state.yaml
 
 ## Plugin System (ProxyModel)
 
-ProxyModel is mcpctl's plugin system. Each project is assigned a **plugin** that controls how Claude interacts with its servers. Plugins are composed from two layers: **TypeScript plugins** (MCP middleware hooks) and **YAML pipelines** (content transformation stages).
+ProxyModel is mcpctl's plugin system. Each project is assigned a **plugin** that controls how Claude interacts with its servers.
+
+There are two layers:
+- **Plugins** — TypeScript hooks that intercept MCP requests/responses (gating, tool filtering, etc.)
+- **Pipelines** — YAML-defined content transformation stages (pagination, summarization, etc.)
 
 ### Built-in Plugins
 
-| Plugin | Includes gating | Content pipeline | Description |
+Plugins compose through inheritance. A plugin can `extend` another plugin and inherit all its hooks:
+
+```
+gate                   → gating only (begin_session + prompt delivery)
+content-pipeline       → content transformation only (pagination, section-split)
+default                → extends both gate AND content-pipeline (inherits all hooks from both)
+```
+
+| Plugin | Gating | Content pipeline | Description |
 |--------|:-:|:-:|---|
-| **default** | Yes | Yes | Gate + content pipeline. The default for all projects. |
-| **gate** | Yes | No | Gating only — `begin_session` gate with prompt delivery. |
-| **content-pipeline** | No | No | Content transformation only — no gating. |
+| **gate** | Yes | No | `begin_session` gate with prompt delivery |
+| **content-pipeline** | No | Yes | Content transformation (paginate, section-split) |
+| **default** | Yes | Yes | Extends both — gate + content pipeline combined |
+
+The `default` plugin doesn't reimplement anything — it inherits the gating hooks from `gate` and the content hooks from `content-pipeline`. Custom plugins can extend built-in ones the same way.
 
 **Gating** means Claude initially sees only a `begin_session` tool. After calling it with a task description, relevant prompts are delivered and the full tool list is revealed. This keeps Claude's context focused.
 
 ```bash
-# Create a gated project (default behavior)
+# Gated with content pipeline (default — extends gate + content-pipeline)
 mcpctl create project home --server my-ha --proxy-model default
 
-# Create an ungated project (direct tool access, no gate)
-mcpctl create project tools --server grafana --proxy-model content-pipeline
+# Ungated, content pipeline only
+mcpctl create project tools --server my-grafana --proxy-model content-pipeline
+
+# Gated only, no content transformation
+mcpctl create project docs --server my-docs --proxy-model gate
 ```
 
 ### Plugin Hooks
 
-TypeScript plugins intercept MCP requests/responses at specific lifecycle points:
+Plugins intercept MCP requests/responses at specific lifecycle points. When a plugin extends another, it inherits all the parent's hooks. If both parent and child define the same hook, the child's version wins.
 
 | Hook | When it fires |
 |------|--------------|
@@ -186,7 +203,7 @@ TypeScript plugins intercept MCP requests/responses at specific lifecycle points
 | `onPromptsList` | `prompts/list` — can filter prompts |
 | `onPromptGet` | `prompts/get` — can intercept prompt reads |
 
-Plugins compose via `extends` — the `default` plugin extends both `gate` and `content-pipeline`, inheriting all their hooks.
+When multiple parents define the same hook, lifecycle hooks (`onSessionCreate`, `onSessionDestroy`) chain sequentially. All other hooks require the child to override — otherwise it's a conflict error.
 
 ### Content Pipelines