This paper describes a technique for Fractal Image Coding in the Discrete Wavelet Transform (DWT) domain employing variable size range and domain subtrees. The DWT domain is partitioned by means of a top-down quad-tree algorithm. The splitting decision function is implemented by a list ordered with respect to a rate-distortion based partitioning gain. The partitioning and encoding are done at the same pass. Each range subtree has three optional coding modes: zero-tree, fractal prediction by a best fit domain subtree from a pool of the same size and "Intra" scalar quantization of the subtree coefficients. The choice between fractal coding and Intra coding is rate-distortion based.
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