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Nanocrystalline Supermalloy powders were obtained by wet milling in argon atmosphere. As process control agent the C6H6 was used. Several milling times have been used ranging from 2 up to 20 h. The formation of the alloy was evidenced by X-ray diffraction (XRD). An annealing at 623 K for 4 h was applied in order to remove the internal stresses and to finish the solid state reaction. A typical crystallite size of 11-12 nm has been obtained after 20 h of wet milling. The magnetic measurements have been performed in a magnetic field up to 8 T at 300 K. A decrease of magnetization is observed upon increasing the milling time due both to the defects induced during the milling and to adsorbed benzene on the particles surface. Differential scanning calorimetry (DSC) curves show the exothermic peaks correlated with the presence of the C6H6 on the powder particles. The benzene and the internal stresses and crystalline defects are eliminated and an increase of magnetization with milling time can be observed for samples annealed at 623 K for 4 h.