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Spreading codes play important role in direct sequence spread-spectrum (DS-SS) system. M-sequences, gold sequences etc., has been traditionally used as spreading codes in DS-SS. These sequences are generated by shift registers, which are periodic in nature. So these sequences are less in number and this limits the security. This paper presents an investigation on the use of alternative type of sequences called chaotic sequences for DS-SS system. This paper compares the performance of image encryption using conventional pseudo random code generators to that using new chaotic sequence generator. Applicability of different types of generators is studied by examining their autocorrelation, cross-correlation performance, measuring the histogram of the spreaded image and the bit error rate of the system. A residue number arithmetic is added to the system; this system is evaluated and compared to that of non residue number system and measuring its performance.