Graphite-nano particles were prepared by the heat-treatment of diamond-nano particles. Various heat-treatment temperatures in the range 900–1600°C were used. X-ray diffraction studies indicate that the onset temperature of diamond-graphite transition is around 1000°C and the complete conversion of diamond to graphite occurs at 1600°C. X-ray diffraction studies on the potassium intercalated compounds of these graphite-nano particles, while indicating the absence of staging phenomenon, show that small neutral potassium clusters are included in these intercalated compounds. The presence of neutral potassium clusters could also explain the observed magnetic susceptibilities and the large deviations in the ESR g-values of these intercalated nano-graphitic systems.