A method for reducing redundancy between two or more datasets of potentially very large size. The method improves upon current technology by oversubscribing the data structure that represents a digest of data blocks and using positional information about matching data so that very large datasets can be analyzed and the redundancies removed by, having found a match on digest, expands the match in both directions in order to detect and eliminate large runs of data by replace duplicate runs with references to common data. The method is particularly useful for capturing the states of images of a hard disk. The method permits several files to have their redundancy removed and the files to later be reconstituted. The method is appropriate for use on a WORM device. The method can also make use of L2 cache to improve performance.