This paper presents a novel dual-flux-modulator coaxial magnetic gear (DFM-CMG) characterized by high torque capability and high permanent-magnet (PM) utilization efficiency. The DFM-CMG adopts spoke-type outer PM rotor and introduces an auxiliary flux modulator placed in the outermost layer. The harmonic analysis with detailed theoretical derivation is performed to reveal that the ferromagnetic pole shoes on the spoke-type outer PM rotor could modulate the flux density distribution as well and realize a nested magnetic-gearing effect. More effective magnetic harmonics are, thus, led into the air gaps to make contribution to the torque production. The effect of the auxiliary flux modulator on the flux density distribution is also studied by the finite-element (FE) analysis. Due to the presence of the auxiliary flux modulator, the flux leakage is suppressed and the useful harmonics are amplified. A quantitative comparison among the surface-mounted CMG (SM-CMG), spoke-type CMG (ST-CMG), and DFM-CMG is made to verify the performance improvement of the proposed CMG. With the same amount of consumed PMs, the torque capability and PM utilization efficiency of the DFM-CMG shows a 73% growth over the SM-CMG and a 44% growth over the ST-CMG. The ST-CMG and DFM-CMG are finally prototyped and tested to verify the FE analysis.