This would be easier if you renamed the columns of df2 and then you can compare row-wise:
In [35]:
df2.columns = ['A', 'B']
df2
Out[35]:
A B
0 AA BA
1 AD BF
2 AF BF
In [38]:
df1['D'] = (df1[['A', 'B']] == df2).all(axis=1).astype(int)
df1
Out[38]:
A B C D
0 AA BA KK 1
1 AD BD LL 0
2 AF BF MM 1