Over the years, nonmonotonic rules have proven to be a very expressive and useful knowledge representation paradigm. They have recently been used to complement the expressive power of Description Logics (DLs), leading to the study of integrative formal frameworks, generally referred to as hybrid knowledge bases, where both DL axioms and rules can be used to represent knowledge. The need to use these hybrid knowledge bases in dynamic domains has called for the development of update operators, which, given the substantially different way DLs and rules are usually updated, has turned out to be an extremely difficult task. In Slota and Leite (2010b Towards Closed World Reasoning in Dynamic Open Worlds. Theory and Practice of Logic Programming, 26th Int'l. Conference on Logic Programming (ICLP'10) Special Issue 10(4–6) (July), 547–564.), a first step towards addressing this problem was taken, and an update operator for hybrid knowledge bases was proposed. Despite its significance—not only for being the first update operator for hybrid knowledge bases in the literature, but also because it has some applications—this operator was defined for a restricted class of problems where only the ABox was allowed to change, which considerably diminished its applicability. Many applications that use hybrid knowledge bases in dynamic scenarios require both DL axioms and rules to be updated. In this paper, motivated by real world applications, we introduce an update operator for a large class of hybrid knowledge bases where both the DL component as well as the rule component are allowed to dynamically change. We introduce splitting sequences and splitting theorem for hybrid knowledge bases, use them to define a modular update semantics, investigate its basic properties, and illustrate its use on a realistic example about cargo imports.