Diffractive optics is an emerging technology that is capable of producing extremely small and light-weight optical systems that are ideally suited for space-based applications and electro-optics. The manufacturing technology is constantly improving and thereby rapidly reducing the component cost. Presently, the design of diffractive optical elements is done mainly by the manufacturers of the elements, and not the end users. One reason for this is that the system design and optimization requires relatively complicated computations. In order to realize the immense commercial potential, the bulk of the design must shift to the customer (just as with refractive optics). Recent advances in optics analysis technology based on functional calculus and loop-space wavefront fitting finally make it possible to create a desktop design tool for diffractive optics that is fast and simple enough for wide spread use. We will apply the new functional technology to the propagation physics associated with diffractive optics to develop noniterative optimization algorithms and constructive solutions to the diffractive optics inverse problem. The results will be implemented as a general purpose PC-based design tool.Commercial Applications:Diffractive optics can naturally be used anywhere light-weight, flexible, and miniture optical systems are required. Applications include: space-based optics and sensors, integrated optics (replacing electrons with photons in integrated circuits), optical communication, switching and multiplexing, optical signal processing, beam splitters and couplers, laptop displays, beam shaping (e.g. for diode lasers), etc.