The MIPI standard has adopted DPCM compression for RAW data images streamed from mobile cameras. This DPCM is line based and uses either a simple 1 or 2 pixel predictor. In this paper, we analyze the DPCM compression performance as MTF degradation. To test this scheme's performance, we generated Siemens star images and binarized them to 2-level images. These two intensity values where chosen such that their intensity difference corresponds to those pixel differences which result in largest relative errors in the DPCM compressor. (E.g. a pixel transition from 0 to 4095 corresponds to an error of 6 between the DPCM compressed value and the original pixel value). The DPCM scheme introduces different amounts of error based on the pixel difference. We passed these modified Siemens star chart images to this compressor and compared the compressed images with the original images using IT3 MTF response plots for slanted edges. Further, we discuss the PSF influence on DPCM error and its propagation through the image processing pipe.