Thank you. I had read a lot of articles before posting that reply, and it sure seemed like CDS and other derivatives were in the repo category. Looks like I read it wrong.
FYI, CDS are essentially insurance against default on a bond. Another common derivative is the option, which is the right but not the obligation to buy (a call option) or sell (the put option) a security in the future for a pre-specified price.
In general, derivatives are just securities whose value is based on the value of another security. They play a very distinct role in the financial markets.
The purpose of derivatives is to hedge against risk.
Repos are mainly used by securities dealers to raise short-term financing to fund day-to-day operations. In fact, repos are the primary source of short-term credit for most dealers. From the lenders' point of view, repos are a good investment for money market funds and other institutional investors who have a short-term need to park cash with minimal risk.
In addition, sometimes repos are used by bears who are speculating that the price of Treasury bonds (or other low-risk bond) will go down. A repo from the lender's point of view can be the bond market analogue to a short sale in the stock market.