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Fiber-optic dispersion and its effect on optical transmission system are analyzed. The most commonly used dispersion compensation fiber (DCF) technology is studied in this article. Three schemes (pre-compensation, post-compensation, mix-compensation of dispersion compensation) of dispersion compensation with DCF are proposed. The simulation model of the WDM based on the Optisystem is presented according to the above principle. The simulation results such as Q factor and BER are given and deeply analyzed. It is found that mix- compensation performance is the best. And the input fiber power is taken as 9-10 dB, the corresponding BER performance is better.