QDX is an old lossy audio compression format, designed for portable multimedia players with small amount of memory.
QDX files are encoded at 128 kbit/s but bitrate can be "peeled" so that lower bitrate stream can be extracted and saved on portable player (up to 2.5 hours of music on a 32 MB) without need of transcoding, which is called Fit-To-Media.
What is more, this format is resistant to dropouts while streaming, which is called Fit-To-Stream.
QDX format also offers DRM info, which prevents from unauthorized use of files.
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