The .38 Special actually uses a .35 caliber bullet. The cases of the .38 and .357 cartridges are .38 inches in diameter. I believe the designation "38" comes from an older cartridge whose bullet diameter was the same as its cartridge case diameter.
The main dimensional difference between the .38 Special and .357 Magnum cartridges is that the .357 is about an eighth of an inch longer. That is to prevent the use of .357 cartridges in .38 Special revolvers. .357 cases are also a bit thicker. But the REAL difference between the two is that the .357 is loaded to much higher pressures than the .38. The .38 Special was originally a black powder round, and its case capacity is underutilized with modern propellants. The .357 just uses up that extra case capacity.
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