A noval uderstanding on the mechanism of volume hologram was presented. Being different from the classical physical model with Bragg′s law, the new model is based on Fabry Perot etalon, i.e. a volume hologram is consisted of a series of coupled Fabry Perot. The advantage of multi beam interfernece results in the characteristics of volume hologram. Very good diffraction spectra were obtained from the new model based computer simulations.