PERFORMING LOGICAL NETWORK FUNCTIONALITY WITHIN DATA COMPUTE NODES

Some embodiments provide a method for a managed forwarding element (MFE) operating within a first data compute node (DCN) that executes on a first host machine. The MFE is for implementing a logical network that logically connects the first DCN to a plurality of other DCNs. At the MFE, the method receives several packets generated within the first DCN to be forwarded to a second DCN that is logically connected to the first DCN. The method determines whether the second DCN executes on the first host machine or on a second, different host machine. When the second DCN executes on the first host machine, the method stores the packets in a memory space of the first host machine that is shared between the first and second DCNs.