Backup Method - Differential

Differential backup works by taking a Full Backup and then taking one or more "Differential" backups where each differential backup is the differences between the backup run and the original full backup.  The advantage of differential  backup is that only the full backup and a single differential are required to restore the state of files. 

Differential Backup Method

Restore with Differential Method

Differential Backup Disk I/O and Storage Impact

The dis-advantage of differential compared to incremental is that it requires more storage space as many changes or differences are duplicated in each differential backup run in a cumulative fashion.  Typically a differential backup is scheduled so that one full backup is performed weekly for example on Monday every week and a daily differential backup is run on the other 4 working days.