Describes novel methods for compressing data character strings into "storage optimized indices" (SOIs) and stores their adaptive Ziv Lempel (AZL) indices, called "evolution based indices" (EBIs), in fields in corresponding entries in a SOI dictionary. The method also compresses data using the SOI dictionary, which accesses the corresponding EBIs for representing the compressed data. The EBIs are put into storage, or transmitted to a receiving location. Greater data compression processing efficiency is obtained by using the SOI dictionary than is available using prior types of AZL dictionaries. The disclosure further describes methods for decompressing EBI indices into corresponding phrases at a receiving location using either a conventional AZL dictionary or a SOI dictionary after translating received EBIs into SOIs. Also described is a submethod for phrase length determination for use in the decompression process. Using this phrase length detection, received phrases are decompressed in their reverse character order through a buffer, or directly in a target storage area, or in a combination of the latter two techniques. The phrase length may be stored in corresponding dictionary entries to avoid a length tracing process in the invention.