diff --git a/docs/topics/auth/passwords.txt b/docs/topics/auth/passwords.txt
index 76284ae72f..3d95b4b387 100644
--- a/docs/topics/auth/passwords.txt
+++ b/docs/topics/auth/passwords.txt
@@ -14,17 +14,19 @@ How Django stores passwords
 ===========================
 
 Django provides a flexible password storage system and uses PBKDF2 by default.
-Older versions of Django used SHA1, and other algorithms couldn't be chosen.
 
 The :attr:`~django.contrib.auth.models.User.password` attribute of a
 :class:`~django.contrib.auth.models.User` object is a string in this format::
 
-    algorithm$hash
+    <algorithm>$<iterations>$<salt>$<hash>
 
-That's a storage algorithm, and hash, separated by the dollar-sign
-character. The algorithm is one of a number of one way hashing or password
-storage algorithms Django can use; see below. The hash is the result of the one-
-way function.
+Those are the components used for storing a User's password, separated by the
+dollar-sign character and consist of: the hashing algorithm, the number of
+algorithm iterations (work factor), the random salt, and the resulting password
+hash.  The algorithm is one of a number of one-way hashing or password storage
+algorithms Django can use; see below. Iterations describe the number of times
+the algorithm is run over the hash. Salt is the random seed used and the hash
+is the result of the one-way function.
 
 By default, Django uses the PBKDF2_ algorithm with a SHA256 hash, a
 password stretching mechanism recommended by NIST_. This should be
@@ -36,13 +38,14 @@ algorithm, or even use a custom algorithm to match your specific
 security situation. Again, most users shouldn't need to do this -- if
 you're not sure, you probably don't.  If you do, please read on:
 
-Django chooses the an algorithm by consulting the :setting:`PASSWORD_HASHERS`
-setting. This is a list of hashing algorithm classes that this Django
-installation supports. The first entry in this list (that is,
-``settings.PASSWORD_HASHERS[0]``) will be used to store passwords, and all the
-other entries are valid hashers that can be used to check existing passwords.
-This means that if you want to use a different algorithm, you'll need to modify
-:setting:`PASSWORD_HASHERS` to list your preferred algorithm first in the list.
+Django chooses the algorithm to use by consulting the
+:setting:`PASSWORD_HASHERS` setting. This is a list of hashing algorithm
+classes that this Django installation supports. The first entry in this list
+(that is, ``settings.PASSWORD_HASHERS[0]``) will be used to store passwords,
+and all the other entries are valid hashers that can be used to check existing
+passwords.  This means that if you want to use a different algorithm, you'll
+need to modify :setting:`PASSWORD_HASHERS` to list your preferred algorithm
+first in the list.
 
 The default for :setting:`PASSWORD_HASHERS` is::