Considers both reference bit and modify bit.
We have the following four possible cases:
- (0, 0) - neither recently used nor modified - best page to replace.
- (0, 1) - not recently used but modified - not as good because we need to swap out a page, but still better than used pages.
- (1, 0) - recently used but unmodified.
- (1, 1) - recently used and modified - the worst page to replace.
Requires hardware support for reference and modify bits.