A method is proposed and evaluated for coding a notched scan that jumps back and forth between adjacent scan lines of a normal raster. Alternate points in the line are coded using the normal differential quantizer algorithm while the remaining points use a nonlinear predictor proposed by Graham. The advantage of the algorithm over normal differential quantization is that the prediction strategy is improved while the advantage over other two-dimensional strategies is that the effect of transmission errors is confined to the line pair being processed and does not spread vertically. For coarse coding there is a significant improvement in picture quality when compared with normal differential quantization while for high-quality pictures there is a small reduction in entropy. The effect of transmission errors is investigated and shown to be similar to the effect with normal differential quantization.