Fe-6.5% Si alloys have good magnetic properties due to their high electrical resistivity, very low magneto-striction, and low crystalline anisotropy. Despite their strong potential, these alloys have seldom been used in magnetic applications because of the very poor ductility of Si-steel above 3.0 wt% Si [1-4]. It is difficult to achieve compressed Fe-6.5% Si powder cores with excellent properties because of the low density due to poor ductility. In compressed powder cores, high density is essential in order to obtain high magnetization and permeability. In this study, an attempt was made to produce Fe-3%Si powder cores because the Fe-3.0 wt% Si alloys have relatively good magnetic properties and room temperature ductility. Gas atomized Fe-3.0 wt% Si powder was compressed into toroid shape cores. By reducing the Si content to 3.0 wt%, the hysteresis loss could be greatly reduced and thus the total core loss could be minimized. The total core loss is 600 mW/$cm^3$ at 0.1 T and 50 kHz.