1) DWDM combines multiple optical signals so that they can be amplified and transmitted over a single fiber, increasing network capacity.
2) Basic DWDM system components include terminal multiplexers and demultiplexers, line repeaters, and optical terminals. Optical add-drop multiplexers allow removal or insertion of wavelengths along the span.
3) Proper link budgeting is required to ensure optical power levels remain above minimum thresholds to maintain signal quality as light propagates long distances through fiber. Regular monitoring and troubleshooting helps ensure transmission quality parameters are met.