7-zip is a relatively new archive format that boasts a high compression ratio while maintaining a fairly fast decompression speed.  Although originally published for Windows only, 7-zip has been ported to Unix-like operating systems through the p7zip project, and this has easily made a DOS port possible.

DOS binaries for p7zip (including the SFX module) can be found on iBiblio:

http://www.ibiblio.org/pub/micro/pc-stuff/freedos/files/util/compression/7zipx.zip 

The source code for p7zip (unmodified, copy makefile.djgpp to makefile.machine and compile) is easily accessible from the p7zip homepage at http://p7zip.sf.net.