In block transformation, INTRA coded blocks as well as prediction errors are processed by a two-dimensional DCT function.
The purpose of this step is to achieve further compression by representing the DCT coefficients with no greater precision than is necessary to achieve the required quality.
Here extra compression (non-lossy) is done by assigning shorter code-words to frequent events and longer code-words to less frequent events. Huffman coding is usually used to implement this step.