1. An embedded block coding (EBC) image coding apparatus, comprising: (a) a computer processor; and (b) programming in a non-transitory computer readable medium and executable on the computer processor for receiving an image and performing steps comprising: (i) performing differential pulse code modulation (DPCM) coding at different prospective quantization levels of a received image block; (ii) determining bit-coverage for the image block based on spatial texture or color components for each DPCM quantization level, and for pulse code modulation; (iii) performing partitioning of the image block into spatial or color component sub-blocks, and selecting either PCM coding, or DPCM coding at a particular quantization level for each of said sub-blocks; and (iv) sharing a bit budget between each of the sub-blocks of a given block, whereby left-over bits are allocated to any of the sub-blocks to optimize coding.