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Files compressed by SQ are identified by changing the middle initial of the extension to "Q", so that text files ended with the extension .TQT, executable files ended with the extension .CQM or .EQE, documents with .DQC, etc. SQ used static Huffman coding as the compression algorithm.
Groups of files were often combined into an archive using the LU program, which created .LBR files containing all the files needed for a particular group, such as all the files needed to install an application. Typically such files were either individually compressed (because LU did not compress files) or the LBR archive was itself compressed with SQ (similarly to the use of tar and gzip together in more modern times).
With the development of the ARC program (which combined both compression and archiving into one program) and its ARC archive file format, SQ essentially became obsolete on most systems, except CP/M, which lacked an ARC port for several years. On CP/M systems, the CRUNCH compression program was written to implement the LZW algorithm (as ARC did) and plug the gap.