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Two hybrid coding systems utilizing a cascade of a unitary transformation and differential pulse code modulators (DPCM) systems are proposed. Both systems encode the transformed data by a bank of DPCM systems. The first system uses a one-dimensional transform of the data where the second one employs two-dimensional transformations. Theoretical results for Markov data and experimental results for a typical picture are presented for Hadamard, Fourier, cosine, slant, and the KarhunenLoeve transformations. The visual effects of channel error and also the impact of noisy channel on the performance of the hybrid system, measured in terms of the signal-to-noise ratio of the encoder, is examined and the performance of this system is compared to the performances of the two-dimensional DPCM and the standard two-dimensional transform encoders.