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This paper presents a new context modeling technique for arithmetic coding of DCT coefficients in video compression. A key feature of the new technique is the inclusion of all previously coded coefficient magnitudes in a DCT block in context modeling. This enables adaptive arithmetic coding to exploit the redundancy of the high-order Markov process in the DCT domain with a few conditioning states. In addition, a context weighting technique is used to further improve the coding efficiency. The complexity of the new arithmetic coding scheme is slightly lower than that of context-based adaptive binary arithmetic coding (CABAC) of H.264. Moreover, the scheme is made compatible to the AVS baseline profile. It achieves on average 13% improvement in compression ratio over context-based two dimension variable length coding (C2DVLC) designed for the DCT domain, and a similar coding efficiency as the CABAC technique in H.264.