# Internalizing Tool Knowledge in Small Language Models via QLoRA Fine-Tuning

arXiv: https://arxiv.org/abs/2605.17774 · HTML: https://mlsanity.com/paper/2605.17774/

## Key facts

- No citing papers in the map yet (data through 14 Oct 2026).
- Placed in Tool learning and function calling, one of 16 directions in LLM agents and tool use.
- Builds on 19 of its 35 references that are in the map.
- First posted on arXiv 18 May 2026.

## Placed in

- LLM agents and tool use / [Tool learning and function calling](https://mlsanity.com/agents/tool-learning-and-function-calling/)

## Builds on (most cited first, 19 of 19)

- [LoRA: Low-Rank Adaptation of Large Language Models](https://mlsanity.com/paper/2106.09685/) (2021)
- [Qwen3 Technical Report](https://mlsanity.com/paper/2505.09388/) (2025)
- [Judging LLM-as-a-Judge with MT-Bench and Chatbot Arena](https://mlsanity.com/paper/2306.05685/) (2023)
- [Measuring Massive Multitask Language Understanding](https://mlsanity.com/paper/2009.03300/) (2020)
- [Think you have Solved Question Answering? Try ARC, the AI2 Reasoning Challenge](https://mlsanity.com/paper/1803.05457/) (2018)
- [Toolformer: Language Models Can Teach Themselves to Use Tools](https://mlsanity.com/paper/2302.04761/) (2023)
- [HellaSwag: Can a Machine Really Finish Your Sentence?](https://mlsanity.com/paper/1905.07830/) (2019)
- [QLoRA: Efficient Finetuning of Quantized LLMs](https://mlsanity.com/paper/2305.14314/) (2023)
- [ToolLLM: Facilitating Large Language Models to Master 16000+ Real-world APIs](https://mlsanity.com/paper/2307.16789/) (2023)
- [Gorilla: Large Language Model Connected with Massive APIs](https://mlsanity.com/paper/2305.15334/) (2023)
- [Distilling Step-by-Step! Outperforming Larger Language Models with Less Training Data and Smaller Model Sizes](https://mlsanity.com/paper/2305.02301/) (2023)
- [API-Bank: A Comprehensive Benchmark for Tool-Augmented LLMs](https://mlsanity.com/paper/2304.08244/) (2023)
- [LLMLingua: Compressing Prompts for Accelerated Inference of Large Language Models](https://mlsanity.com/paper/2310.05736/) (2023)
- [ToolACE: Winning the Points of LLM Function Calling](https://mlsanity.com/paper/2409.00920/) (2024)
- [MCP-Bench: Benchmarking Tool-Using LLM Agents with Complex Real-World Tasks via MCP Servers](https://mlsanity.com/paper/2508.20453/) (2025)
- [SKILL0: In-Context Agentic Reinforcement Learning for Skill Internalization](https://mlsanity.com/paper/2604.02268/) (2026)
- [ToolGen: Unified Tool Retrieval and Calling via Generation](https://mlsanity.com/paper/2410.03439/) (2024)
- [SLIM: Let LLM Learn More and Forget Less with Soft LoRA and Identity Mixture](https://mlsanity.com/paper/2410.07739/) (2024)
- [AssetOpsBench: Benchmarking AI Agents for Task Automation in Industrial Asset Operations and Maintenance](https://mlsanity.com/paper/2506.03828/) (2025)

## Abstract (arXiv)

Large language models are increasingly used as planning components in agentic systems, but current tool-use pipelines often require full tool schemas to be included in every prompt, creating substantial token overhead and limiting the practicality of smaller models. This paper investigates whether tool-use knowledge can be internalized into small language models through parameter-efficient fine-tuning, enabling structured planning without explicit tool descriptions at inference time. Using AssetOpsBench as the primary benchmark, we fine-tune Gemma 4 E4B and Qwen3-4B with 8-bit QLoRA on approximately 1,700 tool-use examples spanning tool knowledge, question-to-plan mappings, and execution-style traces. We evaluate the resulting models under description-free inference, where the prompt omits the tool catalog entirely. The fine-tuned models outperform an informed unfine-tuned baseline that receives full tool descriptions, reducing input length by 82.6% while improving structural and LLM-judge planning scores. In the best Gemma run, the model achieves an AT-F1 of 0.65 and an overall judge score of 3.88, compared with 0.47 and 2.88 for the informed baseline. Qwen3-4B achieves a strong overall judge score of 3.78 while using 62% less memory and running 2.5× faster than Gemma, though it also exhibits greater catastrophic forgetting on general multiple-choice benchmarks. Additional ablations show that LoRA rank controls a quality--retention trade-off, with r=32 maximizing planning quality and smaller ranks preserving more general knowledge. These results suggest that, for fixed tool catalogs, QLoRA fine-tuning can shift tool knowledge from prompt context into model weights, substantially reducing inference overhead while maintaining or improving tool-planning quality.