Sandra H. answered 11/18/14
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NAD/NADH and FAD/FADH2 are both nucleotides that are "used" during glycolysis and the citric acid cycle. They are both "electron carriers": The FAD and NAD forms accept electrons and hydrogens and in this way store energy that was released during glucose breakdown (Glycolysis and/or citric acid cycle).. NAD becomes NADH when it accepts an electron pair. FAD becomes FADH2 when it accepts an electron pair.
Both NADH and FADH2 are formed in the cytoplasm of mitochondria (of cells), and then move to mitochondrial membranes to donate electrons to the electron transport chain. When they do so the electrons travel down the electron gradient, and generate a H+ gradient across the mitochondrial membrane. This hydrogen gradient is then stored potential energy that is later used to generate ATP from ADP + Pi, in ATP synthase enzymes also located in the mitochondrial membrane. NADH generates 3 ATP molecules from the energy it stores from glucose breakdown, and FADH2 generates 2 ATP molecules.