Final answer:
The compression algorithm used in DFS Replication with Windows Server 2012 is called Remote Differential Compression (RDC), which detects changes within files and replicates only those differences.
Step-by-step explanation:
The compression algorithm used in DFS Replication with Windows Server 2012 is called Remote Differential Compression (RDC). RDC is a sophisticated algorithm that can detect insertions, removals, and rearrangements of data in files, and then only replicate the changes between files over a network.
This means that if only a small part of a file changes, only that portion of the file is sent over the network, saving on bandwidth and improving replication efficiency.