When on, the buffer is considered to be modified. This option is set when:

1. A change was made to the text since it was last written. Using the |undo| command to go back to the original text will reset the option. But undoing changes that were made before writing the buffer will set the option again, since the text is different from when it was written.
2. 'fileformat' or 'fileencoding' is different from its original value. The original value is set when the buffer is read or written. A ":set nomodified" command also resets the original values to the current values and the 'modified' option will be reset. Similarly for 'eol' and 'bomb'. This option is not set when a change is made to the buffer as the result of a BufNewFile, BufRead/BufReadPost, BufWritePost, FileAppendPost or VimLeave autocommand event. See |gzip-example| for an explanation. When 'buftype' is "nowrite" or "nofile" this option may be set, but will be ignored. Note that the text may actually be the same, e.g. 'modified' is set when using "rA" on an "A".