streams. Finally, the IDFT is performed on each decoupled signal stream to recover the corresponding transmitted QAM symbol stream. Optical OFDM system has similar block diagram as Fig. 1 but without the DFT or IDFT modules marked as dark blocks. Intuitively, the OFDM system has a high PAPR since after IDFT at the transmitter multiple input QAM symbols could be phase-synchronously added together and therefore causes high signal amplitude (peak power). The high PAPR of the signal decreases the system power efficiency and makes the transmission more sus- ceptible to nonlinear impairments of the fiber link. On the other hand, the DFT and IDFT cancel each other and thus the DFT-spread OFDM system is essentially a single-carrier technique which in general has much a lower PAPR. However, note that the optical DFT-spread OFDM considered here is fundamentally different from the traditional single-carrier scheme [5], in that the former exhibits the advantages of both the single-carrier system (i.e., low PAPR) and the OFDM system (i.e., tone-by-tone single tap equalizer). For the long-haul optical fiber transmission, the fiber link comprises n$_{E}$ fiber spans. We consider a periodic dispersion map on existing 10Gb/s infras- tructure. In this case, the high PAPR caused by dispersion is trivial and we therefore focus on reducing the PAPR at the transmitter. We consider three typical distortions in the fiber channel, CD, first-order PMD, and PDL. The 2 × 2 transfer function at subcarrier m corresponding to a DFT-spread 2.2 MIMO Channel Model for PDM 5