Today's voice/data communication packet or circuits switched networks are characterized by hybrid architectures. The relatively low transmission bandwidth of electronics and optoelectronic interfaces makes it difficult to fully utilize the large bandwidth of optical fiber. This problem can be overcome if the data is left in optical form during signal processing steps such as address recognition, demultiplexing, switching, routing, regeneration, dispersion compensation, and clock recovery. This requires high bandwidth, ultrafast, all-optical devices to perform these signal processing functions. These will allow move away from electronic bandwidth of a few tens of gigahertz to a terahertz bandwidth offered by all-optical devices thus fully utilize the enormous capacity of an optical fiber. This requires new data formats as well as a whole new class of ultrafast all-optical devices. We will describe a new generation of such devices based on different optical phenomena such as wavelength filtering, phase shifting, optical interference, mixing, and controlled nonlinear index changes which enable us to perform various very complex functionalities not only in today's networks but also for the future use in all-optical data networks.