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In this paper, we investigate image compression using 2D dual-tree discrete wavelet transform (DDWT), which is an overcomplete transform with direction-selective basis functions. To further sparsify DDWT coefficients, an iterative projection-based noise shaping method is employed. We analyze the statistics of DDWT coefficients as well as the inter-scale, inter-subband, and intra-subband dependency among the DDWT coefficients. We further evaluate the application of SPIHT and EBCOT for coding DDWT coefficients. Experimental results show that SPIHT is more effective than EBCOT for DDWT, and the DDWT-SPIHT coder outperforms JPEG2000 at low bit rates and is comparable to JPEG2000 at high bit rates.