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Nyquist Wavelength division multiplexing (N-WDM), is a promising scheme in order to enhance the spectral efficiency of future coherent optical communication systems. In N-WDM systems, the channel bandwidth and spacing are selected to maximize the spectral efficiency while maintaining acceptable levels of inter-carrier and inter symbol interference. To further increase the spectral efficiency, bandwidth constrained N-WDM, where baudrate is higher than channel bandwidth can be considered. We propose to combine the bandwidth-constrained N-WDM scheme with a decision feedback equalizer (DFE) designed according to the minimum mean square error (MMSE) criterion. We show that the enhanced resilience to the inter symbol interference offered by DFE provides an effective gain on spectral efficiency. We compare system benefits of DFE and maximum a posteriori sequence detection (MAP) for coherent optical receivers, and show that DFE is as efficient as MAP in mitigating inter symbol interference at a considerably lower complexity.