diff --git a/docs/model-chain.md b/docs/model-chain.md
index 86a9e24..69f765c 100644
--- a/docs/model-chain.md
+++ b/docs/model-chain.md
@@ -1,18 +1,53 @@
-# AI Model Chain — IT Pro Partner
+# AI Model Architecture — IT Pro Partner
 
-**Updated:** July 24, 2026
+**Updated:** July 27, 2026
 
-## Active Fallback Chain
+Two separate concepts that must not be conflated:
+
+---
+
+## Fallback Chain *(auto-failover — config.yaml)*
+
+Survives admin-ai outage. Uses direct API keys for F1–F4.
 
 | Tier | Model | Provider | Notes |
 |---|---|---|---|
-| **Primary** | `claude-sonnet-5` | `admin-ai` | Conductor via LiteLLM ($3.33/day cap) |
-| **Fallback 1 (F1)** | `deepseek-v4-pro` | `deepseek` | Direct DeepSeek API |
-| **Fallback 2 (F2)** | `gpt-5.6-terra` | `admin-ai` | Demoted from Primary via LiteLLM ($3.33/day cap) |
-| **Fallback 3 (F3)** | `grok-4.5` (`grok-2-1212`) | `xai` | Direct xAI API |
-| **Fallback 4 (F4)** | `gemini-3.6-flash` | `google` | Direct Google API |
+| **Primary** | `deepseek-v4-flash` | `admin-ai` | Fast, cheap conductor via LiteLLM |
+| **F1** | `deepseek-v4-flash` | `deepseek` (direct) | Same model, direct API |
+| **F2** | `gemini-3.6-flash` | `google` (direct) | Fast, free-tier eligible |
+| **F3** | `grok-4.6` | `xai` (direct) | Verified working (NOT grok-4.5) |
+| **F4** | `claude-sonnet-5` | `anthropic` (direct) | Premium survival fallback |
+
+**Only fires when the model above it is unreachable.**
+
+---
+
+## Operational Models *(daily toolbox — admin-ai only)*
+
+No direct API keys. Shared $5/day budget via hermes-agent-v3 key.
+
+| Role | Model | When |
+|---|---|---|
+| Conductor | `deepseek-v4-flash` | Orchestrating, delegating, quick decisions |
+| Workhorse | `deepseek-v4-pro` | Large context, big outputs, infra code |
+| Workhorse | `deepseek-reasoner` | Multi-step analysis, debugging, planning |
+| Auditor | `gemini-3.6-flash` | Sanity checks, every output (essentially free) |
+| Auditor | `claude-sonnet-5` | Architecture, security, auth — sparingly ($15/M output) |
+
+---
 
 ## Admin-AI Virtual Key
-- **Key Hash**: `0237186aaff1ed90295c00d73103103900d4bd07252ec1806af8a4358e45d37a`
-- **Allowed Models**: `claude-sonnet-5`, `gpt-5.6-terra`, `deepseek-v4-pro`, `deepseek-v4-flash`, `glm-5.2`, `MiniMax-M3`, `qwen3.7-plus`
-- **Daily Budget Cap**: $3.33 / day
+
+- **Key Name:** `hermes-agent-v3` (generated Jul 27, 2026)
+- **Daily Budget Cap:** $5/day shared across all operational models
+- **Expiry:** Jul 27, 2027
+- **Master Key:** stored in Hudu
+
+## Budget Targets
+
+| Component | Daily est. |
+|---|---|
+| Conductor (ds-v4-flash) | ~$0.30 |
+| Workhorses (ds-v4-pro + reasoner) | ~$1.70 |
+| Auditors (gemini + claude sparingly) | ~$0.80 |
+| **Total** | **$3–5/day** |