Custom compression tool
You need better constants - "\u201d" is too magic - I would have no idea that it is a right double quotation mark just looking at that.

Don't use a bare except - you'll catch things you don't want to (for example, Ctrl+C).  Also, narrow the try as much as you can - if it is this big, it will be very hard to tell what caused the error. You should strongly prefer catching specific errors over all errors - errors you aren't expecting are probably bugs, and you'll want to learn about them.

Instead of calling __contains__ use in.

Don't use string concatenation the way you are - that's gonna be wasteful. Instead, use string.join.

You also don't need to forward declare all of these variables.

Using a format string will help the debug section be clearer.

You probably also want to factor out the first if branch into its own function, but given that it seems a little similar to the outer branch and the loop.  My guess is that the entire function this is in could be redesigned to be simpler and more modular, however without seeing that I can't speak exactly to it.

If you always increment pointer_position, put it in a finally block.

Overall, I'd recommend something more like this

elif current_command == "\u201d":
    compressed_strings = []
    position = pointer_position
    while position &lt; len(commands) - 1:
        position += 1

        try:
            current_command = commands[position]
            if current_command in dictionary.unicode_index:
                position += 1
                pointer_position += 1
                next_command = commands[position]

                f = lambda x: str(dictionary.unicode_index.index(x))
                index = f(current_command) + f(next_command)

                next_string = dictionary.dictionary[int(temp_index)].title()

                compressed_strings.append(("" if not compressed_strings else " ") + next_string)
            elif current_command == "\u201d":
                break
            elif current_command == "\u00ff":
                compressed_strings.append(str(pop_stack(1)))
            else:
                compressed_strings.append(current_command)
        except Exception:
            break
        finally:
            pointer_position += 1
        if debug:
            print("{} with {}".format(pointer_position, hex(ord(current_command))))

    stack.append(''.join(compressed_strings))