This paper presents the first in-orbit demonstration of a hybrid formation-control strategy using two 2U CubeSats within the NanoFF mission, validating the capabilities of the TUBiX-5 platform for close-proximity multi-satellite operations. The mission combines low-thrust propulsion and propellant-less differential-drag control in distinct operational phases: thruster maneuvers were used to correct an initial transverse drift of \({45}\,\hbox {km d}^{-1}\) , after which differential drag was employed to further reduce relative distance while maintaining passive collision safety through a helix orbit geometry. Out-of-plane maneuvers were executed in Sunlit periods to refine cross-track separation, despite limited attitude-determination performance in eclipse. A key contribution is the first publicly reported in-orbit validation of Two-Line-Element (TLE)-based operational relative navigation for formation control on 2U CubeSats, used both for maneuver planning and for verifying drag- and thrust-based corrections during periods of intermittent GNSS availability. In addition, the mission demonstrates the first publicly reported in-orbit implementation of an autonomous drag management system on 2U CubeSats for formation control, enabling sustained along-track regulation with reduced ground-operator workload while satisfying power and safety constraints. The results confirm that resource-limited satellites can achieve fuel-efficient, collision-safe, and scalable formation control through a sequenced hybrid approach that integrates propulsion, differential drag, and TLE-based navigation. These findings establish performance benchmarks for future academic and commercial multi-satellite missions and support the development of autonomous nanosatellite systems for inspection, servicing, and rendezvous and docking.