It is possible to use a function in one or more arguments of another function. Make sure you use parenthesis properly though as they are critical to avoid errors.
Here is an example: if FieldA is not blank then write the average of 3 fields (B,C and D) to the target field. Otherwise write "n.a.":
In this example, the avg function is "nested" inside the If statement. You can "nest" as many functions as you want.
This capacity of Automatic Field Calculations is key and can lead to pretty complex but powerful calculations.