Nested virtualization was introduced in Windows Server 2016 Hyper-V and when enabled the virtualization extensions of the CPU are exposed into the virtual machine vCPUs enabling Hyper-V to function within the VM. The new Dv3 and Ev3 VM series will support nested virtualization which will enable new testing type scenarios where nested virtualization is required. It would also enable Hyper-V containers (kernel mode isolation) to be used in an Azure based container host.

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