Multiplexing is a technique where multiple wavelengths are used on 1 or 2 fibers - both bidirectional and two fiber connections
are possible. Datacommunication channels are not limited to the widely used 1310nm and 1550nm. A complete spectrum ranging from 1260nm to 1620nm can be used - 1625nm and 1650nm are used for monitoring with an OTDR [see testing for more info].
CWDM & DWDM Coarse Wavelength Division Multiplexing [CWDM] is using a channel spacing of 20 nanometer because the lasers [typically DFB Lasers] that are used can drift to shorter and longer wavelengths when temperatures change. The fact that uncooled lasers can be used means CWDM is the most cost effective solution for increased capacity.
Dense Wavelength Division Multiplexing [DWDM] is used when more than 18 channels are needed or when attenuation is very high. With a - variable - channel spacing as low as 0,2 nanometer [25GHz -with DWDM we use GHz instead of nanometers since a spacing of 0,2 nanometer is less easy to calculate], much more channels can be used [up to 160].
Best of Both Worlds We suggest always to use CWDM whenever possible because DWDM can be used within the CWDM channels! So cascading channels for future upgrades is an effective solution without interfering with live channels.