How to: Diff files using TFS APIs?

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You can use the Difference.DiffFiles method which compares two files using the internal diff engine, and return the linked list of DiffSegments:

DiffSegment ds = Difference.DiffFiles(fileA, FileType.Detect(fileA, null), fileB, FileType.Detect(fileB, null), new DiffOptions());

Console.WriteLine(ds.Next == null ? "Identical" : "Different");

// If you don’t have the files locally on disk, you’ll need to download them first:
// The path can be a temp file:
// Path.Combine(Environment.GetEnvironmentVariable("tmp"), "diff_" + someRandomValue);

string fileA = "Local path for file A";
string fileB = "Local path for file B";
VersionControlServer vcs = new TeamFoundationServer("https://tfs:8080").GetService(typeof(VersionControlServer));

vcs.DownloadFile("$/Proj/a", fileA);
vcs.DownloadFile("$/Proj/b", fileB);