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There have been many studies to recycle abandoned Nd-Fe-B magnets. Of these, some studied the conversion of sintered Nd-Fe-B magnet scrap to bonded magnet powder. This conversion, however, has never been used in production yet. The present study aims to develop a highly coercive magnet powder for bonded magnets from Nd-Fe-B sintered magnet scrap. In general, the magnetic property of the powders is dramatically lost through crushing of the sintered magnet because of microstructural damage. The magnetic property of the powders is partly recovered by a heat-treatment due to the healing of microstructural damages. The coercivity of the powders could be fully restored by heat-treatment with a surface modifier such as DyF3. Surface-morphology change and microstructural uniformity may lower the nucleation sites of reversed domains, which may be responsible for recovery of demagnetization loop squareness and an increase in iHc. An anisotropic powder obtained from the Nd-Fe-B magnet scrap exhibits Br=11.6 kG, iHc=13.3 kOe, and (BH)max=31.1 MGOe.