We are pursuing development of a very compact XFEL based on inverse Compton scattering (ICS) from a nanopatterned electron beam.  CXFEL depends on a novel method to produce transform-limited x-ray output in all dimensions, i.e., with all photons in a single degenerate quantum state. This method avoids the noise amplification of SASE by imprinting a well-defined coherent modulation on the electrons via diffraction in a thin crystal grating. The spatial pattern in the diffracted electrons is then converted to a temporal pattern using sophisticated electron optics that exchange the transverse and temporal phase space dimensions. The result is a nano-patterned electron beam that can be tuned for wide range of applications. The method allows for coherent control of the phase, frequency, bandwidth, pulse length and amplitude of the x-ray pulses, and enables a variety of 2-color or multi-color experiments with precisely tunable femtosecond delays for pump-probe experiments, and perhaps even sub-cycle phase-locking of the multiple colors.    The output will cover the photon energy range from 100 eV to 8 keV.