GNU Emacs Lisp Reference Manual
Emacs keeps a flag called the modified flag for each buffer, to record whether you have changed the text of the buffer. This flag is set to t whenever you alter the contents of the buffer, and cleared to nil when you save it. Thus, the flag shows whether there are unsaved changes. The flag value is normally shown in the mode line (see Mode Line Variables), and controls saving (see Saving Buffers) and auto-saving (see Auto-Saving).
Some Lisp programs set the flag explicitly. For example, the function set-visited-file-name sets the flag to t, because the text does not match the newly-visited file, even if it is unchanged from the file formerly visited.
The functions that modify the contents of buffers are described in Text.
t if the buffer buffer has been modified since it was last read in from a file or saved, or nil otherwise. If buffer is not supplied, the current buffer is tested.nil, or as unmodified if the flag is nil. Another effect of calling this function is to cause unconditional redisplay of the mode line for the current buffer. In fact, the function force-mode-line-update works by doing this:
(set-buffer-modified-p (buffer-modified-p))
set-buffer-modified-p (above) instead.nil (or omitted), the current buffer is used.