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Sawdust is a byproduct of the manufacture of lumber from raw wood. Wood is typically turned into lumber through sawing. Saws are lined with a row of tiny cutting protrusions, like little knives, and when run back and forth over wood, the saw cuts out a stream of small chips.

In the 20th century sawdust started to be further processed into sawdust pellets, of uniform size and moisture content, to serve as a fuel, in heating stoves, or barbeques.