The probability of drawing a non-defective screw is $\frac{7}{10}$. Since the screws are drawn with replacement, the probability of drawing two non-defective screws is $\frac{7}{10} \times \frac{7}{10} = \boxed{\frac{49}{100}}$.
Option A is incorrect because it is impossible to guarantee that none of the two screws drawn
will be defective.Option B is incorrect because it is the probability of drawing one defective
screw, which is not what the question asks.Option C is incorrect because it is the probability of drawing two defective screws, which is also not what the question asks.