A dual-fuel system — also called hybrid heat — pairs an electric heat pump with a gas furnace on shared ductwork. The Department of Energy describes it as combining 'the efficiency of a heat pump with the reliability of a gas furnace.' The heat pump does the heating in milder weather, where it is cheapest to run; when the temperature drops far enough, the system automatically switches over to the furnace, which delivers strong heat regardless of how cold it gets outside.
The switchover happens around the system's economic balance point — the outdoor temperature where running the furnace becomes cheaper (or more capable) than leaning on the heat pump and its electric backup. A good installer sets that crossover based on your local gas and electric rates and the home's load, rather than a factory default, so each fuel runs when it is the better deal.
Dual-fuel makes the most sense for a home that already has a gas line and sees genuine cold snaps: you get heat-pump efficiency for the bulk of the season without depending on expensive electric-strip backup on the coldest nights. It is the natural upgrade when replacing an aging AC on top of a still-good gas furnace — the heat pump simply takes the place of the air conditioner. In a mild climate, or where the goal is to get off gas entirely, a single cold-climate heat pump is usually the simpler choice. Note that dual-fuel keeps a combustion appliance, so it is generally not the path to a fully electrified, all-heat-pump home.