A Pt/C multilayer stack (15 layer-pairs) with Fe impurities was prepared on a glass substrate by the ion sputtering technique. Ion irradiation effects on this multilayer were studied following irradiation with 2MeV Au ions at fluences from 1×10 14 to 1×10 15 ions/cm 2 . Irradiation induced atomic displacements in such multilayers have been earlier analyzed by a combined X-ray standing wave (XSW) and X-ray reflectivity (XRR) technique with a depth resolution better than 0.2nm [S.K. Ghose, B.N. Dev, Phys. Rev. B 63 (2001) 245409; S.K. Ghose, D.K. Goswami, B. Rout, B.N. Dev, G. Kuri, G. Materlik, Appl. Phys. Lett. 79 (2001) 467]. Using the combined XSW-XRR technique ion beam induced preferential movement of Fe from C- to Pt-layers has been detected. At the highest ion fluence Pt layers (containing Fe) break into nanoparticles apparently surrounded by C. Grazing incidence X-ray diffraction (GIXRD) measurements indicate the formation of FePt particles in the irradiated multilayer samples. Results of magnetic force microscopy (MFM) and magneto-optical Kerr effect (MOKE) measurements reveal that while the virgin sample hardly shows any magnetism, the irradiated samples show a soft ferromagnetism with an increasing coercive field with increasing ion fluence. Use of focused ion beam to fabricate ferromagnetic nanodots and their possible uses in spin electronics are discussed.