Suppose the expansion dictionary looks like the following: 
- Hexadecimal Entry
- Description
- C1
- Alphabet entry for character A. This by definition is an unpreceded entry.
- 101
- A preceded entry, with characters C and 1; with preceding entry index of X'C1'; offset of 1.
- 201
- A preceded entry, with characters E, 1, 2, 3, and 4; with preceding entry index of X'101'; offset of 3.
When processing an input compression symbol of X'201':
- Characters E1234 are placed at offset 3, and processing continues with entry X'101'.
- Characters C1 are placed at offset 1, and processing continues with entry X'C1'.
- Character A is placed at offset 0.
The expansion results in the 8 characters A, C, 1, E, 1, 2, 3, and 4 placed in the output string.