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Short-distance, millimeter-level ranging based on backscatter RF tags remains a challenge today. We propose a composite dual-frequency continuous-wave and continuous-wave (DFCW/CW) radar system for localization of backscatter RF tags. The coarse DFCW range result is used to correct the cycle ambiguity of the more accurate CW range result. A minimum mean square error (MMSE)-based method is employed to combine the DFCW and CW ranging data, given spectrum constraints. The composite radar concept is demonstrated with a custom 5.8-GHz backscatter RF tag system in a typical indoor laboratory environment with a strong line-of-sight (LOS). Results show that the MMSE technique can resolve the CW cycle ambiguity for a moving tag and results in a range error of approximately 1 mm after an acquisition period.