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DEFUSE / DIFFUSE
To defuse means to remove the fuse. Diffuse means spread out.
Defuse
The verb defuse refers to the act of deactivating a bomb. (Defuse literally means 'to remove the fuse'.) It is often used figuratively to mean 'to disarm' or 'to pacify'.
Examples:
Paul, go back in the meeting and defuse all the arguing.
How long did it take you to defuse the bomb?
Diffuse
The adjective diffuse means 'spread out' or 'not concentrated in one place'. Diffuse can also be a verb meaning 'to circulate' or 'to spread'.
Examples:
She is the CEO of a large diffuse company.
I need speakers that will diffuse my music around the whole arena.