DWDM is definately not my specialty but a basic understanding of it is DWDM is a method empolyed to increase the bandwidth of fiber optic transmission systems. This is accomplished by multiplexing the various wavelengths of light that travels down a fiber optic cable.
A fiber optic signal is made up of many wavelengths, and it is these wavelengths that are split up, each forming its own individual path. WDM (Wave Division Multiplexing) could multiplex up to 4 wavelengths, while DWDM can multiplex up to 40 (at the time of this writing) and that maximum is increasing.
In DWDM each light path can support up to OC-48 over a 40 channel system, thereby yielding a system capable of almost 100 Gbps (Gigabits per second).