The effects of Polarization Mode Dispersion (PMD) cause signal distortion. When we increase the bit rates, PMD has been found to be a time varying and an unstable phenomenon. Thus compensation of PMD is required since it distorts the signal and broadens the pulse in a statistical manner. We analyze the PMD effects and simulations have been done using the OPTISYSTEM. Fiber bragg compensator has been suggested to overcome the dispersion limit. According to the relative position of the Dispersion Compensating Fiber (DCF) and Single Mode Fiber (SMF), Post- Compensation, Pre-Compensation and Mixed Compensation techniques have been proposed. Different location on the system will generate different nonlinear effects. Three different dispersion compensation techniques have been discussed and results have been analyzed. © International Science Press.