Diablo – Damage modifiers in Diablo 3 items

Yes, it is included in the DPS value.

If you'll notice, the speed of this weapon is listed as 1.09 attacks per second, while the standard polearm has a speed of just 1.00.

The one thing that isn't considered is the potential 15% bonus from dual wielding.

If an items does 10 - 15 base-damage and you put in a gem that adds +2 min / +2 max the new damage range is 12 - 17 damage.

Before the patch, the calculation was exactly the same, but +2-4 damage is much more confusing (in my opinion). The new wording just clarifies what really happens.

EDIT:
Explanation of the old tool-tip: the damage modifiers of rubies (and +X min or +X max) on a weapon are calculated before other damage modifiers (like elemental damage for example). Within this, the +X min get applied first, taking our example weapon from above to 12 - 15 damage after this, the +X max gets added, resulting in said 12 - 17 damage.

If we get another weapon with a very small damage range like 10 - 11 damage it works the same - but after the +X min is applied, we get 12 - 11 damage which doesn't make sense. As a result, the max-damage is raised to 13 and then the +X max gets added, resulting in 12 - 15 damage. We ended up with +2 min / +4 max.

Now, if we take a weapon with 10 - 10 damage (no range), we theoretically end up with 12 - 15 damage again, which is +2 min / +5 max (or +2-5 damage) but this doesn't happen in game as there's always a damage-range, so this possibility was excluded from display.

Conclusion: the old tool-tip showed the theoretical maximum effect a ruby could have, which doesn't really happen in-game. Even my second example only happens rarely (only if you put a high ruby in a low-level weapon) so the new tool-tip is much more exact.