Abstract: A data compressor scans one or more data files to locate variable-length strings of characters (data) that can be more efficiently compressed by delta compression (i.e. by referring to a string in an earlier version of the data file) than by traditional compression (i.e. by referring to a string of characters that occurs earlier in the data file). The compressor employs a criterion to select the strings that are likely to be most amenable to delta compression, i.e. to provide the highest overall compression ratio. The compressor creates a dictionary that describes the selected strings, which can then be advantageously used to delta-compress edited (changed) versions of the data files for transmission to another computer. In addition, a "dual-mode" data compressor employs a combination of delta and traditional compression to efficiently compress data and send one or more files from a sending computer to a receiving computer, where a decompressor reconstitutes a copy of the files.