Abstract: Briefly introduced and numerically analyzed is the working theory of the nonlinear optical loop mirror(NOLM) as the demultiplexer ofthe all optical time-division multiplexing(OTDM) system by solving the nonlinear schrodinger equations. Further discussed is the effect of the group velocitydispersion(GVD) on its demultiplexing results as well as the NOLM switch window.Proved is that, in practise, both the GVD parament of the fiber loop and the walkoff between two pulses must be restricted according to the conditions of boththe received signal and control pulses.

Key words: optical fiber communication, demultiplexing, cross-phase modulation