An apparatus forming part of a system including a boring tool that is movable by a drill string having an extendable length that leads from a drill rig to the boring tool for performing a horizontal directional drilling operation that advances the boring tool through the ground, said apparatus comprising: a transmitter supported by the boring tool for transmitting an electromagnetic homing signal, said transmitter including a magnetometer for producing magnetic readings that characterize the magnetic field of the earth and an accelerometer for generating pitch readings that characterize a pitch orientation of the boring tool; a portable device configured for monitoring the electromagnetic homing signal including determining a signal strength of the electromagnetic homing signal and for receiving the electromagnetic homing signal in a homing mode for use in generating homing commands to guide the boring tool to a target position in relation to the portable device; and a processor configured for generating steering commands for guiding the boring tool in a steering mode using the magnetic readings, the pitch readings and the extendable length of the drill string such that at least some positional error is introduced between an actual position of the inground tool and a predicted location of the inground tool and for switching from the steering mode to the homing mode based at least in part on said monitoring of the electromagnetic homing signal as the boring tool approaches the portable device to, thereafter, guide the boring tool to the target position in compensation for said positional error, and wherein one of the processor and the portable device is configured to compare the signal strength to a signal strength threshold as part of switching from the steering mode to the homing mode. a transmitter supported by the boring tool for transmitting an electromagnetic homing signal, said transmitter including a magnetometer for producing magnetic readings that characterize the magnetic field of the earth and an accelerometer for generating pitch readings that characterize a pitch orientation of the boring tool; a portable device configured for monitoring the electromagnetic homing signal including determining a signal strength of the electromagnetic homing signal and for receiving the electromagnetic homing signal in a homing mode for use in generating homing commands to guide the boring tool to a target position in relation to the portable device; and a processor configured for generating steering commands for guiding the boring tool in a steering mode using the magnetic readings, the pitch readings and the extendable length of the drill string such that at least some positional error is introduced between an actual position of the inground tool and a predicted location of the inground tool and for switching from the steering mode to the homing mode based at least in part on said monitoring of the electromagnetic homing signal as the boring tool approaches the portable device to, thereafter, guide the boring tool to the target position in compensation for said positional error, and wherein one of the processor and the portable device is configured to compare the signal strength to a signal strength threshold as part of switching from the steering mode to the homing mode.