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A real time power-monitoring module for each wavelength channel that is suitable for guarding dense WDM (DWDM) networks and controlling an optical fiber amplifier is described. We proposed a compact real time demultiplexing channel monitor module (DCMM), which was applied to a micro-monochromator using an optimised photodetector array (PDA) and a novel sol-gel glass diffraction grating. The on board type demultiplexing channel monitor modules, which were based on the simple free space optics of the littrow mount with a low thermal expansion coefficient package, were fabricated and the optical performance estimated. From the results, it was found that the flattop and athermal characteristics of the wavelength responses were the best solution for DWDM channel monitoring systems.