How does AngularJS handle DOM manipulations in the context of two-way data binding?

AngularJS handles DOM manipulations in the context of two-way data binding by automatically updating the DOM when the underlying data changes. It establishes a bidirectional connection between the model and the view, allowing changes in one to reflect in the other and vice versa. This is achieved through the use of watchers and a digest cycle that efficiently updates only the parts of the DOM affected by the data changes. Understanding this mechanism is crucial for building responsive and dynamic user interfaces in AngularJS.