"encode" is the name of a so-called function. In C++ and several other programming languages, "()" at the end of a name indicates that the name refers to a function. A function is a set of instructions charged with performing a certain kind of operation. Here, the operation performed by the function "encode" is presumably that of... encoding something (since the names chosen for functions usually reflect the sort of thing they are supposed to do...).

(Functions are usually passed values or "arguments", which are listed inside the parentheses. As for the function "encode", the argument probably consists of a string or reference to the object or text to be encoded.)

As for the relation of between the function "encode" and the codec itself:
Codecs are usually devices "capable of encoding and/or decoding a digital data stream or signal". (http://en.wikipedia.org/wiki/Codec) So, here it is reasonable to assume that "encode" is in fact a function - in the sense indicated above - located at the relevant codec (understood as a device) and charged with the task of encoding things.

My only reservation to my answer has to do with the possibility that the text may be written by a non-English speaker, in which case prepositions are often used in strange ways... (Especially by German and central European programmers...)