Notes for Third Order IMD Dynamic Range
This test is a real mouthful—"Two Tone Third Order Intermodulation Distortion Dynamic Range". But it's not hard to understand, if you take it one step at a time.

Two or more strong signals outside a receiver's passband can generate false signals (called "IMD products").

Let's call those strong signals f1 and f2. The "third order" IMD products will show up at frequencies of (2f1-f2) and (sf2-f1). For example, if strong signals enter your receiver at 14.040 and 14.060 MHz, the IMD products will appear at 14.020 and 14.080 MHz. See the graphic below.

To test for third order IMD products, you connect two signal generators to the receiver's antenna connector (using a hybrid combiner and attenuator to prevent the signal generators from interfering with each other). Then you connect a true RMS voltmeter to the receiver's AF output.

The signal generators are set 20 kHz apart. You tune the receiver to one of the frequencies at which IMD products are known to occur. Then you crank up the power of the signal generators until you get a 3 dB increase on the AF meter.

The difference between the net power being delivered by the signal generators and the MDS is the "Two Tone Third Order IMD Dynamic Range." The higher the better.

We test at both of the IMD frequencies. We report the worst case results.
The following graphic is based on very useful information contained in Chapter 26 of the ARRL Handbook. It shows the relationship between MDS, blocking dynamic range, and IMD dynamic range. The author makes the point that in his prototype receiver, the IMD dynamic range is 23 dB smaller than the blocking dynamic range. Thus, IMD products will be heard well before the receiver begins to lose sensitivity.

Keep in mind that these nice, neat relationships between IMD and blocking dynamic range may never actually be encountered in your receiver. As we pointed out in our notes to blocking dynamic range, all too often phase noise from a poorly performing local oscillator or synthesizer may intervene well before you reach the blocking dynamic range level.