Iron dust can be obtained in several different ways. The default recipe shown in the Slimefun Guide Book is by crushing Iron Ore in the Ore Crusher or Electric Ore Grinder. Doing so will produce two Iron Dust. As you can see, this is a great way to quickly double your Iron.
In addition to producing Iron Dust by crushing or grinding it in a machine, it can also be obtained from running Sifted Ore through an Ore Washer or an Electric Dust Washer. When doing so, you’ll have about an 11.11% change of getting an iron dust for each sifted ore you process. This essentially turns gravel into Iron.
Iron Dust has several uses, you may find it as part of a recipe for smelting a new alloy or you can simply smelt the raw Iron Dust and get an Iron Ingot out of each dust that you smelt in a Smeltery or Electric Ingot Factory.