i'm not positive, orion may have to chime in, but i think what it does is it tells the computer that the wheels are slipping.. so it keeps the power distribution 50/50 at all times front to rear (instead of normal 15/85 and changing with conditions) but it does this without gearing down into 4wheel low so you can still maintain higher speeds... you wouldnt feel any difference switching to 2wd because the front wheels would still be connected to the drive line, you would have to remove the connections to make the front wheels truely free spinning to realize any sort of performance or economy gain from running it as a rear wheel drive