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Yes are exactly right. The code is executed from setup() upon waking up from deep sleep. To get accurate ambient temperature, it minimizes the execution time to avoid heat generated from the ESP8266. It tries not to do things repeatedly (i.e. looping). Although, technically there is still loops in this program , like the function that connects to WiFi. I could have moved it into loop(), but I didn't because it is the same function that I used in other program. I don't want to rewrite it for the sake of moving it to loop().
How to build a WiFi Thermom...View Instructable »
How to control DC motors using Arduino