SAC (Spectral Amplitude Coding) is a technique of OCDMA (Optical Code Division Multiple Access) to encode and decode data bits by utilizing spectral components of the broadband source. Usually OOK (ON-Off-Keying) modulation format is used in this encoding scheme. To make SAC OCDMA network spectrally efficient, advanced modulation format of DQPSK (Differential Quaternary Phase Shift Keying) is applied, simulated and analyzed. m-sequence code is encoded in the simulated setup. Performance regarding various lengths of m-sequence code is also analyzed and displayed in the pictorial form. The results of the simulation are evaluated with the help of electrical constellation diagram, eye diagram and bit error rate graph. All the graphs indicate better transmission quality in case of advanced modulation format of DQPSK used in SAC OCDMA network as compared with OOK