Wavelength Division Multiplexing (WDM) is a technique that multiple signals are carried together as separate wavelengths (color) of light in a multiplexed signal. WDM is used in optical fiber networks. WDM and FDM (Frequency Division multiplex) are both based on the same principles but WDM applies to wavelengths of light in optical fiber while FDM is used in electrical analog transmission. A WDM optical system using a diffraction grating is completely passive, unlike electrical FDM, and thus is highly reliable. Further, a carrier wave of each WDM optical channel is higher than that of an FDM channel by a million times in frequency (THz versus MHz).
Wavelength Division Multiplexer is a device that combines optical signals from multiple different single-wavelength end devices onto a single fiber. Wavelength Division Multiplexer carries two to four wavelengths per fiber. The original WDM systems were dual-channel 1310/1550 nm systems. Typically, the same device can also perform the reverse process with the same WDM techniques: de-compose the data stream with multiple wavelength into multiple single wavelength data streams, a process call de-multiplexing. Therefore, it is very often a Wavelength Division Multiplexer and Demultiplexer are in the same box.

WDM: Wavelength Division Multiplex and Multiplexer
Related Terms: TDMA, DWDM, CWDM, Multiplexer
Reference Links: http://www.technologyreview.com/purchase/pdf_dl.asp?79juh=729916&hy6f0=1516: Wavelength Division Multiplex
