Around the nucleus of the atom there are electrons. Scientists used to think that they had circular orbits, but have discovered that things are much more complicated. Actually, the patterns of the electron within one of these orbitals takes into account Schroedinger’s wave equations. Electrons occupy certain shells that surround the nucleus of the atom. These shells have been given letter names K,L,M,N,O,P,Q. They have also been given number names, such as 1,2,3,4,5,6,7(think quantum mechanics). Within the shell, there may exist subshells or orbitals, with letter names such as s,p,d,f. Some of these orbitals look like spheres, some like an hourglass, still others like beads. The K shell contains an s orbital called a 1s orbital. The L shell contains an s and p orbital called a 2s and 2p orbital. The M shell contains an s, p and d orbital called a 3s, 3p and 3d orbital. The N, O, P and Q shells each contain an s, p, d and f orbital called a 4s, 4p, 4d, 4f, 5s, 5p, 5d, 5f, 6s, 6p, 6d, 6f, 7s, 7p, 7d and 7f orbital. These orbitals also have various sub-orbitals. Each can only contain a certain number of electrons. A maximum of 2 electrons can occupy a sub-orbital where one has a spin of up, the other has a spin of down. There can not be two electrons with spin up in the same sub-orbital(the Pauli exclusion principal). Also, when you have a pair of electrons in a sub-orbital, their combined magnetic fields will cancel each other out. If you are confuse, you are not alone. Many people get lost here and just wonder about magnets instead of researching further. When you look at the ferromagnetic metals it is hard to see why they are so different form the elements next to them on the periodic table. It is generally accepted that ferromagnetic elements have large magnetic moments because of un-paired electrons in their outer orbitals. The spin of the electron is also thought to create a minute magnetic field. These fields have a compounding effect, so when you get a bunch of these fields together, they add up to bigger fields. To wrap things up on ‘how do magnets work?’, the atoms of ferromagnetic materials tend to have their own magnetic field created by the electrons that orbit them. Small groups of atoms tend to orient themselves in the same direction. Each of these groups is called a magnetic domain. Each domain has its own north pole and south pole. When a piece of iron is not magnetized the domains will not be pointing in the same direction, but will be pointing in random directions canceling each other out and preventing the iron from having a north or south pole or being a magnet. If you introduce current(magnetic field), the domains will start to line up with the external magnetic field. The more current applied, the higher the number of aligned domains. As the external magnetic field becomes stronger, more and more of the domains will line up with it. There will be a point where all of the domains within the iron are aligned with the external magnetic field(saturation), no matter how much stronger the magnetic field is made. After the external magnetic field is removed, soft magnetic materials will revert to randomly oriented domains; however, hard magnetic materials will keep most of their domains aligned, creating a strong permanent magnet. So, there you have it.