1. A video encoder comprising a transform coder to apply a transform to a residual frame representing a difference between a current frame and a first prediction, the transform coder outputting a coded differential frame as an output of the video encoder; a transform decoder to generate a reconstructed residual frame in response to the coded differential frame; a first adder to create a reconstructed frame by adding the reconstructed residual frame to the first prediction; a non-linear denoising filter to filter the reconstructed frame by deriving expectations and performing denoising operations based on the expectations; and a prediction module to generate predictions, including the first prediction, based on previously decoded frames.