Mill and fill is removing a set depth of the existing asphalt with a milling machine and paving a new lift back in its place at the same finished grade.
It's the call when the grade can't come up at curbs, doors and drain structures, when the surface is too far gone for an overlay to bond to, or when the owner wants the ruts and trip hazards gone instead of buried. Depths commonly run 1½ to 2 inches on lots and deeper on streets.
The estimate has lines an overlay doesn't: the milling itself, transporting the millings (or a credit if the plant takes them as RAP), sweeping, more tack on the rougher milled surface, and a unit price for base repair where the mill exposes soft base.
Tons are usually more predictable than on an overlay, because the mill leaves a consistent depth to fill. You still carry a waste factor, just a smaller one.