This proposal was submitted in response to the solicitation NSF 01-65 on "Ultra-High Capacity Optical Communications and Networking." We have recently introduced a hollow dielectric optical fiber which utilizes a one-dimensional photonic crystal to guide light. This fiber is predicted to have an unrivaled degree of confinement of the electromagnetic energy density in the hollow core - allowing for broad-band and low loss transmission with substantially decreased non-linear behavior. In this proposal we will focus our efforts on creating novel in-fiber optical devices based on the unique characteristics of this hollow waveguide. We will theoretically examine the effects of inducing large periodic modulations along the axial direction of the fiber. These are expected to open large photonic band gaps in the direction of propagation. In particular we will study the possibility of creating high Q cavities within the fiber. Application to high speed all-optical switching and other novel devices will be illustrated. The ability to form all-optical devices in a fiber has many technical advantages, reduction of coupling losses to transmission line - not being the least. It also opens new opportunities to low cost fabrication of optical devices based on fiber production processes. Our efforts will be directed towards the formulation of a general theoretical approach, the design, development and the experimental realization of in-fiber optical devices based on the axially modulated hollow dielectric omnidirectional waveguide.