In a $K$-pair-user two-way interference channel (TWIC), $2K$ messages and $2K$ transmitters/receivers form a $K$-user IC in the forward direction ($K$ messages) and another $K$-user IC in the backward direction which operate in full-duplex mode. All nodes may interact, or adapt inputs to past received signals. We derive a new outer bound to demonstrate that the optimal degrees of freedom (DoF, also known as the multiplexing gain) is $K$: full-duplex operation doubles the DoF, but interaction does not further increase the DoF. We next characterize the DoF of the $K$-pair-user TWIC with a MIMO, full-duplex relay. If the relay is non-causal/instantaneous (at time $k$ forwards a function of its received signals up to time $k$) and has $2K$ antennas, we demonstrate a one-shot scheme where the relay mitigates all interference to achieve the interference-free $2K$ DoF. In contrast, if the relay is causal (at time $k$ forwards a function of its received signals up to time $k-1$), we show that a full-duplex MIMO relay cannot increase the DoF of the $K$-pair-user TWIC beyond $K$, as if no relay or interaction is present. We comment on reducing the number of antennas at the instantaneous relay.