TECHNOLOGY FOCUS - BIOTECHNOLOGY - Preferred Composition: (C2) preferably comprises an agriculturally acceptable carrier, and further comprises an agricultural composition chosen from a fungicide, insecticide, an antimicrobial, a bactericide, a nematocide, and a food preservative. ACTIVITY - Nematocide; Insecticide; Plant antibacterial; Plant antifungal; Antimicrobial; Antibiotic.    25 barley seeds infested with Ustilago hordei were placed in each of two agar plates with the gases of M.albus for four days and then planted in test pots on the greenhouse. After 15 weeks the plants were harvested and evaluated for smut in seed heads. There were 100% control of this disease in two groups of plants that had been exposed to M.albus gases and no sign of any inhibition or damage to the plants caused by the gas treatment. An identical number of control plants (untreated and U.hordei infested seed) had 50% and 41%, respectively of infected seed heads in this experiment. Also, uninfected seed yielded plants having no diseased grains.    MECHANISM OF ACTION - None given.    EXAMPLE - Muscodor albus was isolated by the following method. Several small limbs of a mature Cinnamomum zeylanicum tree were removed and transported back to Montana State University for processing. Small pieces of inner bark, sapwood and other xylem tissues of the limbs were aseptically removed and placed on Petri plates containing water agar. After incubation for several days, hyphal tips of developing fungi were aseptically removed and placed on potato dextrose agar (PDA). In addition, after 7 days, fungal colonies were transferred to gamma irradiated carnation leaves (0.5x0.5 cm) to encourage spore production. Of several fungi that were isolated the one of great interest, because of its musty odor, was an isolate designed 620, later identified as M.albus. M.roseus was isolated by the following method. Fungus was isolated from several small limbs of a Fern-Leafed Gravellia Grevillea pteridifolia obtained from the Northern Territory of Australia. Small pieces of inner bark, sapwood and outer xylem tissues of some small limbs were aseptically removed and placed on Petri plates containing water agar. After incubation for several days, hyphal tips of developing fungi were aseptically removed and placed on potato dextrose agar (PDA). In addition, after 7 days, fungal colonies were transferred to gamma irradiated carnation leaves and other plant materials to encourage spore production. Of the several fungi that were isolated, because of its musty odor, was an isolate designated A3-5. An additional strain of Muscodor was obtained from the small limbs of the Australia Ironwood Erythophelum chlorostachys. This endophyte was isolated using the volatiles of M.albus as a selection tool. Plant material, from which endophytes were to be isolated, were placed in the same agar plate as a rapidly growing two-week old culture of M.albus. Then, the only organisms developing from the plant material were the ones resistant to M.albus, which were possibly other volatile antibiotic producers or relatives of M.albus in the xylariaceous group. The most commonly isolated endophytes from this tree were Pestalotiopsis spp. and other Xylaria spp.. It was internally designated A-10. M.albus was a deuteromycetes (mycelial sterilia) endophytic species bearing molecular relatedness to the ascomycetes group-Xylaria. The fungus was related to Xylariaceae by virtue of 96-98% homology of its 18S rDNA (2089 bp) to representative members of this group. Furthermore, internal transcribed spacer (ITS), 5.8S, and ITS2 sequences (652 bp) of M.albus showed close relatedness to several Xylaria spp. including X.arbuscula, X.longipes, and X.mali at the 89-92% level. Both the 18S rDNA and the ITS 1and2 5.8S rDNA were unique, and therefore, Muscodor was considered a taxonomically distinct genus and species. After searching partial 18S rDNA sequences of M.roseus A3-5 (2055 bp) with data in GenBank under BLASTN 2.2.1, the results showed 100% similarities with 2089 bp of M.albus (AF324337) from site 1-981, 1319-2048, and 98% similarities with 982 bp of X.polymorpha (AB01043) and Hypoxylon fragiforme (AB014046), and 97% similarities with 982 bp of Rosellinia necatrix (AB014044). In addition, isolate A-10 possesses 99% sequence similarity of its 18S rDNA (2051 bp) to that of isolate A3-5. The results of the comparison both the 18S rDNA and the ITS 1and2 and 5.8S rDNA of M.roseus A3-5 possessed high similarities to M.albus. Also, the molecular biological data (18S rDNA) suggests that both isolates A3-5 and A-10 of M.roseus should be considered closely related, and virtually identical organisms.