The source of magnetism in magnetic particle inspection.

All matter is composed of atoms, and atoms are composed of protons and electrons.The protons and neutrons are located in the atoms nucleus and the electrons are in constant motion around the nucleus. Electrons carry a negative electrical charge and produce a magnetic field as they move through space..A magnetic field is produced whenever an electrical charge is in motion. The strength of this field is called the magnetic moment.
This may be hard to visualize on a subatomic scale but consider electric current flowing through a conductor. When the electrons ( electric current)  are flowing through the conductor, a magnetic field forms around the conductor. The magne field can be detected using a compass. The magnetic field will place a force on the compass needle, which is another example of a dipole. Since all matter is comprised of atoms, all materials are affected in some way by a magnetic field. However, not all materials react the same way. This will be explored more in the next section.