The first parameter is a raw data file, as created by the dig program. The second parameter is the compressed file to create. The ERP programs that deal with raw data files - avg(1) , garv(1) , etc. - all know about compressed raw files, so a compressed raw file does not need to be expanded to be used in the ERP system.
The rawexpnd(1) program is available to expand compressed raw files, should it be found necessary to do so.