A data compression and decompression algorithm performing the function of data compression and decompression by using the steps of: dividing a main data stream into sub data streams, calculating frequency of occurrence of sub data streams in the main data stream, repeating the process of calculating frequency of occurrence by changing the number of digits in sub data stream and by changing the starting digit position in main data stream, assigning codes to sub data streams based on their frequency occurrence values, calculating group dimension index for each group, selecting the group with the lowest group dimension index and placing codes of the group with the lowest group dimension index in a multi dimensional space wherein vector placement is utilized to eliminate the need to use digits that are common to neighboring codes therefore providing an additional compression.