S3 Texture Compression
S3 Texture Compression (S3TC) (sometimes also called DXTn or DXTC) is a group of related lossy texture compression algorithms originally developed by Iourcha et al. of S3 Graphics, Ltd.
DXT2 and DXT3
DXT2 and DXT3 (collectively also known as Block Compression 2 or BC2) converts 16 input pixels (corresponding to a 4x4 pixel block) into 128 bits of output, consisting of 64 bits of alpha channel data (4 bits for each pixel) followed by 64 bits of color data, encoded the same way as DXT1.