The short explanation
Display Stream Compression is a light, real-time compression developed by VESA. It is described as visually lossless: measurably not identical to the original, but designed so the difference is not visible in normal viewing. Compression ratios of roughly 3:1 are typical.
Where you run into it
Some formats simply do not fit in 48Gbps uncompressed. 8K60 at full chroma is one. DSC is what makes them possible, and it is why a specification sheet may list a mode “+ DSC”.
The requirement is that both ends support it and negotiate it. A source that can do DSC and a display that cannot will fall back to a lower mode — usually correctly, occasionally with an unexpected result. Because DSC support is declared in the capability data, an EDID that fails to carry it through is enough to lose the mode.
How the DR HDMI 8K handles it
The DR HDMI 8K lists DSC-compressed formats among its supported maximum modes, next to 8K30 4:2:2 12-bit, and passes the full 48Gbps those modes run on. Its DisplayID support matters here too: on displays with 384 or 512-byte EDID, DSC and other capabilities can sit in the later blocks, and those blocks have to survive the trip to the source intact.
Want to test your own HDMI chain?
The DR HDMI 8K is sold through the HDFury.eu web shop.