I haven't learned about compression of data, but from what I know, one has to make some assumptions to store n bit data into m bit space, where m < n. Here, the

I haven't learned about compression of data, but from what I know, one has to make some assumptions to store n bit data into m bit space, where m < n. Here, the assumption seems to be that numbers are necessarily 5 bit, and that there are only 4 numbers. What I fail to understand is how this helps to compress the data in this case. The code isn't really that nice, and the comments seem to assume prior knowledge is this field, which I don't have. So can someone give a ELI-Noob?