More importantly than getting the desired output....do you understand what that function does? Can you explain it somebody else? Keep in mind that YOU are the person who has to support this code at 3am when the phone rings.
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Need to split a string? Try Jeff Modens splitter http://www.sqlservercentral.com/articles/Tally+Table/72993/.
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Understanding and Using APPLY (Part 2) - http://www.sqlservercentral.com/articles/APPLY/69954/