Recent developments in the Internet and Web based technologies require faster communication of multimedia data in a secure form. Standard compression algorithms such arithmetic coding schemes, and propose methods of protecting against these attacks. In the next section we review DHC, and in Section 3 describe DHC encryption scheme and examine possible attacks. In Section 4, we propose an encryption scheme that protects against the attacks and in Section 5 give the results of our experiments. Section 6, concludes the paper. as JPEG and MPEG use an entropy coding stage. By incorporating security in this stage it it possible to add security to compression systems at very low cost. In this paper we describe a combined compression and encryption scheme using Dynamic Huffman Coding. We examine se- 2 curity of the system and show how to make it resistant against known attacks. We also give the result of incorporating this system into JPEG.