By making use of the digital signal processing (DSP) based software-reconfigurable digital orthogonal filtering, digital filter multiple access passive optical networks (DFMA PONs) have demonstrated great potential for offering excellent backward compatibility with existing PONs and supporting future cloud access networks. However, intensity modulation and direct detection (IMDD) DFMA PONs suffer from imperfect channel orthogonality-induced cross-channel interference. In this paper, a DFMA channel interference cancellation (DCIC) technique is, for the first time, proposed and extensively investigated, to significantly improve the downstream and upstream performance of the IMDD DFMA PONs. A comprehensive DCIC theoretical model is developed, and through fitting with experimental measurements, the developed theoretical model is rigorously verified and a set of accurate transceiver/system parameters is identified. It is shown that DCIC increases the aggregated upstream signal transmission capacity by a factor of > 2 and extends the differential optical network unit (ONU) launch power dynamic range by approximately 14 dB. Such significant performance improvements are achieved after just one iteration. Other salient DCIC advantages include ONU count-independent low DSP complexity, small latency and transparency to signal modulation format, signal bit rate, and initial system operation conditions.