Iron-dust cores are produced from insulated iron particles by using the powder metallurgy pressure forming process. These dust cores are suitable for small motor cores because of their high shape flexibility; however, the iron loss of iron-dust cores is larger than conventional laminated cores. Generally, the insulation material between the iron particles degrades the magnetic property of the core. In this paper, the magnetic property of the iron-dust core in which the resin, which is usually used as insulation material, is replaced by the soft magnetic Mn-Zn ferrite or alumina is examined. We have found that the iron-dust core mixed with alumina particles shows higher space factor, 10% lower iron loss, and 30% higher permeability. Contrary to expectation, the magnetic properties of the iron-dust core deteriorate by mixing with soft magnetic Mn-Zn ferrite.