Differential PCM
(DPCM) can be viewed as generalization of DM. In DM, the difference signal  is quantised.
The most recently coded  can be viewed as a prediction of  , and  can be viewed as the error between  and a prediction of  .
In DPCM- (1) prediction of current pixel intensity is obtained more than from previously coded pixel intensity.
(2) Unlike DM, in DPCM more than one bit can be used in coding the error.
A DPCM system is shown in Fig (18 ).
Figure 18 : DPCM SYSTEM
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To code current pixel intensity  , it is predicted from previously reconstructed pixel intensities. The predicted value is  . In the figure we have assumed that  were reconstructed prior to coding  .
We are attempting to reduce the variance of  in this system by using previously coded pixels in the prediction of  . The prediction error  is quantized by a PCM system with uniform or non-uniform quantization. The quantized value  is transmitted.
At the receiver  is combined with  to get  . The previously reconstructed pixel values and the specific way to predict  to get  , is known both at transmitter and receiver.
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