The Differential ZIP Backup plugin for Obsidian allows users to back up modified files in a vault into a ZIP file. It supports creating differential backups that store only the changes made since the last backup. The plugin provides options for backup destinations, including local folders and S3 buckets. It can also encrypt the backup files with a passphrase using AES-256-CBC for added security. Users can restore files from backup or reset backup information to perform a full backup. The plugin also generates a backupinfo.md file, which records file metadata and history, making it easy to track changes and restore specific versions of files.