Design and simulation of new code family for the Spectral Amplitude Coding-Optical Code Division Multiple Access (SAC-OCDMA) networks is present. The new code family called Multi Diagonal (MD) code. The MD code family proposed for SAC-OCDMA applications due to, its advantages such as; the cross-correlation value still zeros in case of an increase the number of users for any weight value. Furthermore, the DCS code supports a large number of users and easy code construction. Based on the theoretical analysis MD code shows here to provide a much better performance compared to Modified Quadratic Congruence (MQC) code and Random Diagonal (RD) code. Proof-of-principle simulations of encoding of 10 users with 10 Gb/s data transmission at a BER of 3.5�10 -14 have been successfully demonstrated together with the DIRECT detection scheme for 45 km fiber length without any amplification or side pumping.