  We demonstrate atomic filtering of frequency-degenerate photon pairs from a
sub-threshold optical parametric oscillator (OPO). The filter, a modified
Faraday anomalous dispersion optical filter (FADOF), achieves 70% peak
transmission simultaneous with 57 dB out-of-band rejection and a 445 MHz
transmission bandwidth. When applied to the OPO output, only the degenerate
mode, containing one-mode squeezed vacuum, falls in the filter pass-band; all
other modes are strongly suppressed. The high transmission preserves
non-classical continuous-variable features, e.g. squeezing or non-gaussianity,
while the high spectral purity allows reliable discrete-variable detection and
heralding. Correlation and atomic absorption measurements indicate a spectral
purity of 96% for the individual photons, and 98% for the photon pairs. These
capabilities will enable generation of atom-resonant hybrid states, e.g.
"Schr\"odinger kittens" obtained by photon subtraction from squeezed vacuum,
making these exotic states available for quantum networking and atomic quantum
metrology applications.
