Abstract: An audio encoding system includes quantization, phase matching, compressed domain processing and other improvements enabling high fidelity, low bit rate encoding systems to be formed. In a preferred embodiment a novel transient detector is used to divide an audio source into transient, low frequency non-transient and high frequency non-transient regions. Low frequency non-transients are sinusoid modeled and the residual is low frequency noise modeled. Transients are transform coded and high frequency non-transients and transform coded residual is high frequency noise modeled. The preferred embodiment also includes novel sinusoid, transform coded and noise quantization, among other methods for providing high fidelity data reduction and for interfacing sinusoid modeling and transform coding. Compressed domain time compression and expansion are further achieved with no detrimental effect on transients.