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In a $K$-pair-user two-way interference channel (TWIC), $2K$ messages and$2K$ transmitters/receivers form a $K$-user IC in the forward direction ($K$messages) and another $K$-user IC in the backward direction which operate infull-duplex mode. All nodes may interact, or adapt inputs to past receivedsignals. We derive a new outer bound to demonstrate that the optimal degrees offreedom (DoF, also known as the multiplexing gain) is $K$: full-duplexoperation doubles the DoF, but interaction does not further increase the DoF.We next characterize the DoF of the $K$-pair-user TWIC with a MIMO, full-duplexrelay. If the relay is non-causal/instantaneous (at time $k$ forwards afunction of its received signals up to time $k$) and has $2K$ antennas, wedemonstrate a one-shot scheme where the relay mitigates all interference toachieve the interference-free $2K$ DoF. In contrast, if the relay is causal (attime $k$ forwards a function of its received signals up to time $k-1$), we showthat a full-duplex MIMO relay cannot increase the DoF of the $K$-pair-user TWICbeyond $K$, as if no relay or interaction is present. We comment on reducingthe number of antennas at the instantaneous relay.

The Degrees of Freedom of the $K$-pair-user Full-Duplex Two-way Interference Channel with and without a MIMO Relay