  We extend the Wolff algorithm to include correlated spin interactions in
diluted magnetic systems. This algorithm is applied to study the
site-bond-correlated Ising model on a two dimensional square lattice. We use a
finite size scaling procedure to obtain the phase diagram in the
temperature-concentration (Tc,C) space. We also have verified that the
autocorrelation time diminishes in the presence of dilution and correlation,
showing that the Wolff algorithm performs even better in such situations.
