To provide a dust core having a high magnetic permeability and a low loss, and a manufacturing method thereof.

The dust core comprises a plurality of coated particles having an insulating film on surfaces of soft magnetic particles, and the soft magnetic particles comprise Fe-Si-Al allow particles and Fe-Ni alloy particles. The Fe-Si-Al alloy particles have an average particle size of 25 to 100 μm, and the Fe-Ni alloy particles have an average particle size of less than 25 μm. Spaces formed by the plurality of Fe-Si-Al alloy particles are filled with fine Fe-Ni alloy particles which are superior in compressibility relatively and have a small coercive force, so that the dust core is superior in moldability and can have an improved magnetic permeability and a low loss. Raw material powder is compressed and molded and then is subjected to heat treatment at a heating temperature of 550 to 900°C. Therefore, distortion during molding is eliminated to reduce a hysteresis loss, and thermal damage of the insulating film is prevented to reduce an eddy current loss, and then the dust core with a low loss can be obtained.