We considered the phase coherence dynamics in a Two-Frequency and Two-Coupling (TFTC) model of coupled oscillators, where coupling strength and natural oscillator frequencies for individual oscillators may assume one of two values (positive/negative). The bimodal distributions for the coupling strengths and frequencies are either correlated or uncorrelated. To study how correlation affects phase coherence, we analyzed the TFTC model by means of numerical simulations and exact dimensional reduction methods allowing to study the collective dynamics in terms of local order parameters [S. Watanabe and S. H. Strogatz, Physica D 74(3–4), 197–253 (1994); E. Ott and T. M. Antonsen, Chaos 18(3), 037113 (2008)]. The competition resulting from distributed coupling strengths and natural frequencies produces nontrivial dynamic states. For correlated disorder in frequencies and coupling strengths, we found that the entire oscillator population splits into two subpopulations, both phase-locked (Lock–Lock) or one phase-locked, and the other drifting (Lock–Drift), where the mean-fields of the subpopulations maintain a constant non-zero phase difference. For uncorrelated disorder, we found that the oscillator population may split into four phase-locked subpopulations, forming phase-locked pairs which are either mutually frequency-locked (Stable Lock–Lock–Lock–Lock) or drifting (Breathing Lock–Lock–Lock–Lock), thus resulting in a periodic motion of the global synchronization level. Finally, we found for both types of disorder that a state of Incoherence exists; however, for correlated coupling strengths and frequencies, incoherence is always unstable, whereas it is only neutrally stable for the uncorrelated case. Numerical simulations performed on the model show good agreement with the analytic predictions. The simplicity of the model promises that real-world systems can be found which display the dynamics induced by correlated/uncorrelated disorder.