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Sleep mode is power-saving mode which allows your computer to quickly resume it's full-power operation when you wake it. During sleep mode your computer uses very little power.
Hibernate mode is similar to sleep mode but saves even more power because it saves all of your open documents and running applications to your hard disk and then shuts down your computer. While in hibernate mode your computer uses zero power and when you wake your computer, you are able to pick up where you left off.