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The best monomode optical fiber links have bandwidths orders of magnitude greater than that of the information currently transmitted over them. This excess bandwidth can be exploited using digital PPM to improve receiver sensitivity. This paper analyzes the receiver sensitivity of an optical PPM system over a slightly dispersive channel, i.e., where both "wrong slot" and "false alarm" errors are important. It is shown that receiver sensitivity of better than 100 photons per binary bit-time is theoretically possible using direct detection and uncoded PPM. Ideal heterodyne detection should reduce this to below 5 photons per binary bit-time. Timing extraction and a digital modulation method are discussed.