Fe-x-Cu-100-x alloys (40 less than or equal to x less than or equal to 90) prepared by ball milling nominally pure (99%) Fe and Cu powders and warm compacted (at similar to 300 degrees C) were investigated by differential scanning calorimetry, scanning electron microscopy, x-ray diffraction, and magnetic susceptibility measurements. Both fee and bce diffraction peaks (indicative of pure Fe and Cu) showed that the mixtures were still two phase even after milling for 400 h, and that they were comprised of 6-10 nm diameter grains. Surprisingly, however, calorimetric measurements indicate the presence of a large endothermic peak for these nanocrystalline composites on heating near 600 degrees C and an exothermic peak near 400 degrees C on cooling. Magnetic measurements show that these materials are ferromagnetic at room temperature and remain so (with decreasing saturation magnetization) up to near the Curie point of alpha-Fe, 770 degrees C. However, near 600 degrees C on heating (and also near 400 degrees C on cooling), the magnetic susceptibility indicates the existence of a magnetic phase change. High-temperature x-ray diffraction data show these effects are due to the oxidation of Fe to form magnetite which subsequently decomposes into wustite. The thermal hysteresis observed in the magnetic and thermal data is due to the sluggishness of the latter transformation. Furthermore, heating to temperatures in excess of 600 degrees C results in the dissolution of Cu into the iron oxides which does not reprecipitate on cooling. (C) 1996 American Institute of Physics.