With inline deduplication and compression, the data is organized in 128 KB segments. Depending on the optimization setting, a write into such a segment first gets compressed (when compression is selected) and then a hash is generated. If the hash is unique, the 128 KB segment is written back and the hash is added to the deduplication hash-table. If the hash is not unique, the segment is referenced in the deduplication hash table and discarded. The smallest chunk in the segment can be 4 KB.

For post-processing the system leverages deduplication in Windows Server 2016/2019, files within a deduplication-enabled volume are segmented into small variable-sized chunks (32–128 KB), duplicate chunks are identified, and only a single copy of each chunk is physically stored.