Real-time holography has been used in numerous analog computing applications; most important was in applications of real-time holography in four-wave-mixing for performing correlation and convolution. Correlation algorithms/devices are one of the important areas of pattern recognition. In controlling the beam ratio in four-wave-mixing for both correlation and convolution it is possible to convert the matched filtering to inverse filtering correlation and convolution to deconvolution. We demonstrate that it possible to optically differentiate images simply by deconvolving images with a step function’s Fourier Transforms. A perspective of image differentiation and its limitation, application with optical differential correlation will be discussed in this paper.