The Free On-line Dictionary of Computing (30 December 2018):

virtual 86 mode

    (Or "virtual mode" or "virtual 8086
   mode") An operating mode provided by the Intel 80386 and
   later processors to allow real mode programs to run under
   operating systems which use protected mode.  In this
   sub-mode of protected mode, an operating environment is
   created which mimics the address calculation in real mode.

   In virtual 86 mode the segment MMU is practically turned off
   and the segment registers exhibit the same behaviour as in
   real mode.  The paged MMU, however, still operates.  This
   means that the one megabyte address space of real mode can
   be remapped in four kilobyte pages to anywhere in the 32 bit
   physical address space.  Each page can be protected
   separately from read or write accesses.

   Virtual mode is handled on a per-task-basis, so each
   exception (from protection violations or interrupts)
   switches the processor back into protected mode.  It is
   therefore possible to have multiple tasks in virtual mode
   which run concurrently under the control of an operating
   system which runs in protected mode.

   Most operating system services in MS-DOS systems are called
   by software interrupts, which are a kind of exception.  If
   an MS-DOS application runs in virtual mode under the control
   of a protected mode operating system, each call to MS-DOS
   causes a switch to protected mode.  The operating system
   emulates the MS-DOS service and switches back to the
   application in virtual mode.  From the viewpoint of the
   application nothing differs from real mode.

   Microsoft Windows, Windows NT, and OS/2 use this feature
   to implement "DOS-boxes" in which both MS-DOS and real mode
   application programs can run.