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A new test data compression method is presented. Based on the fact that adjacent test vectors in a test set have least incompatible bits, test vectors are grouped and amalgamated into a vector by assigning 1 or 0 to unspecified bits and c to incompatible bits. Extended frequency-directed run length based on compatibility (EFDR-BC) is used to encode the merged test vector. EFDR-BC can encode strings of 1s, 0s, and cs. The numbers of test vectors, incompatible bits and values of incompatible bits in a group make up the group head code. Experiments with the test sets of the ISCAS 89 benchmark circuit show that the method can achieve higher compression ratio.