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We provide an analysis of optical interactions with a nanoslit structure formed on a metal film. In particular we analyzed the excitation and coupling of surface plasmons (SPs) at the input and output apertures of the nanoslit as well as the propagation of light in the nanoslit waveguide structure. In the input coupling case, an incident light (TM polarized) is found to induce polarization charges on the surface around the aperture. These charges generate the normal component of electric field on the incident surface around the corner. This results in an inward flow (funneling) of incident power into the slit. At the output side, the slit corners again play a critical role, exciting SPs on the exit surface, which propagate away from the slit, and also allowing for decoupling of the SP power into free-space radiation. In the case of narrow slits, the incident optical power is carried exclusively via the SP mode that has an antisymmetric distribution of polarization charges on the slit walls. The materials required to support a surface-bound wave are also discussed, taking into account the dielectric loss of metal.