A multiplexed holographic Fabry-Perot (MHFP) etalon technology which incorporates a multiplexed hologram into a novel holographic Fabry-Perot (HFP) etalon is being investigated by Physical Optics Corporation (POC). Two unique advantages of the MHFP etalon technology are: (i) coherently-coupled fabrication of HFP mirrors significantly reduces the need to have nearly flat surfaces typical in conventional Fabry-Perot (FP) etalons (and thus, results in an inexpensive, large aperture FP etalon) and (ii) the angular/wavelength multiplexing capability of a multiplexed hologram can be combined with the uniqueness of FP etalons (such as narrow- band operation and tunability). The primary objective in Phase II will be the continued development of both HFP and MHFP devices and applications not achievable by conventional FP etalons. Specifically, Phase II will concentrate on optimizing the performance of HFP etalons, advancing the fabrication technology HFP etalons, developing tunable HFP technology in solid and air- spaced etalon configurations, studying the enhancement of diffraction efficiency in MHFP etalons, and developing a tunable MHFP etalon technology. POC will also demonstrate prototypes for optical communications and processing applications based on these novel technologies.