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Most communication in TCP/IP takes the form of exchanges of information between a program running on one device, and a matching program on another device. Each instance of an application represents a copy of that application software that needs to send and receive information. These application instances are commonly called processes.

Multiplexing - At the sender site, there may be many processes that want to send their packets. TCP at transport layer accepts all these messages from different sockets differentiated by their port numbets and after adding headers, passes the segment to the network layer. This process is termed as Multiplexing.

Demultiplexing - At the receiver site, the TCP at transport layer accepts datagrams from network layer, removes IP header, checks their port numbers and then delivers the datagrams to the respective sockets and ultimately to the attached processes. This process is referred to as Demultiplexing.

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