PURPOSE: To manufacture an inexpensive dust core of a magnetic Fe-Si-Al alloy having favorable magnetic characteristics by adding water to magnetic Fe-Si-Al alloy powder and compacting the powder to form a green compact easy to handle.

CONSTITUTION: Magnetic Fe-Si-Al alloy powder having a composition consisting of about 4W13wt% Si, about 4W7wt% Al and the balance Fe is mixed with a binder such as sodium silicate, and after adding ≤ about 5% water, the mixture is press-molded. The molded body is calcined at about 750°C in hydrogen to obtain an inexpensive dust core of said magnetic Fe-Si-Al alloy having high magnetic permeability, high magnetic flux density, small powder loss and superior magnetic characteristics. Said molded body has high strength and is hardly damaged during transfer, and such molded bodies are easily handled when dust cores are manufactured in large quantities.